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Novo Nordisk Pops As Diabetes Drug Cuts Heart Disease Deaths

Shares of diabetes giant Novo Nordisk ( NVO ) jumped Friday after the company said its drug Victoza reduced heart attacks and strokes. Novo released few details about the results of the study, which it’s saving for the next American Diabetes Association meeting in June. However, it did say that there was a statistically significant reduction in all three of its metrics — heart attack, stroke and death from all cardiovascular causes — among the 9,000 patients taking the diabetes drug over five years, compared to the placebo group. The subjects were all over age 50 and either had cardiovascular disease or multiple risk factors. Novo Nordisk’s stock was up about 8% in afternoon trading on the stock market today , near 57. It’s the highest-rated stock in the low-rated Medical-Ethical Drugs group, with a Composite Rating of 82. The effect of diabetes drugs on cardiovascular health has been the subject of several studies lately, notably from Eli Lilly ( LLY ), whose drug Jardiance reduced deaths from heart failure by 32% in a similar large, long-term study reported last September. On the other hand, Merck ‘s ( MRK ) Januvia showed no effect either good or bad in its outcomes trial reported a few months earlier. A similarly neutral result was reported for an outcomes trial of the Sanofi ( SNY ) drug Elixa, which is noteworthy because Elixa is in the same class as Victoza. Both are glucagon-like peptide-1 (GLP-1) analogs, similar to Bydureon from AstraZeneca ( AZN ) and Lilly’s Trulicity, while Jardiance is an sglt2 inhibitor, in the same class as Invokana from Johnson & Johnson ( JNJ ) and Farxiga from AstraZeneca. Merck’s Januvia belongs to another class, called DPP-4 inhibitors. On a conference call with analysts Friday, Novo’s Chief Scientific Officer Mads Thomsen said that the different results may have come from subtle differences between the drugs, which he thinks extend to Victoza’s planned successor, semaglutide. “It’s not only the question of being a member of the given class of GLP-1 agonist,” said Thomsen. “It’s also a part of the kinetics, dynamics, distribution, half-life, and so on. And as we got semaglutide, we have done rather detailed investigations. . . . There is nothing from the animal pharmacology to negate the notion that semaglutide should do at least as well on cardiovascular performance.”

Medtronic Sales, Operating Margin Mar Otherwise Solid Quarter

Shares of medical-device giant Medtronic ( MDT ) dipped sharply Tuesday after its fiscal Q3 sales missed estimates, though earnings and guidance were in line with expectations. Medtronic’s earnings for the quarter ended Jan. 29 totaled $1.06 a share excluding one-time items, down 1% from the year-earlier quarter and matching the consensus number calculated by Thomson Reuters’ survey of analysts. Sales jumped 61% to $6.93 billion, though adjusted for last year’s buyout of Covidien, as well as foreign-exchange rates, sales increased just 6%. This was about $55 million below consensus. Medtronic affirmed its full-year guidance of $4.36 to $4.40 in EPS, which includes 45 to 50 cents of foreign-currency impact. It did not guide Q4 earnings but said sales should grow 5% to 5.5% excluding the foreign-currency impact, which it sees amounting to $180 million to $220 million. Leerink analyst Danielle Antalffy wrote that the sales miss was largely due to higher-than-expected foreign-exchange headwinds, but there were a few signs of trouble. “U.S. sales growth did slow a bit, coming in at 4% growth vs. our 6% projection and representing a deceleration from the 6% growth seen in (fiscal) Q2 2016 and the 14% growth seen in (fiscal) Q1 2016,” Antalffy wrote. “This slowing growth is likely in large part attributable to increasingly difficult comparables and, to us, doesn’t yet suggest an alarming signal of a broad-based slowdown. “Medtronic did deliver positive operating leverage quarter-over-quarter, with EBIT margins of 27.8% vs. 27.4% last quarter, but this improvement fell below guidance of 28.0%-28.5% and our 28.5% estimate. This now leaves the increasingly positive operating leverage story very much back-end-loaded, with Medtronic having to deliver Q4 operating margins of at least 33.5% to hit its prior guidance for 29%-31% as reported for full-year 2016.” Antalffy also noted that Medtronic’s competitors similarly missed sales estimates in the most recent quarter — among them St. Jude Medical ( STJ ), Boston Scientific ( BSX ) and Johnson & Johnson ( JNJ ) — making Medtronic’s quarter look good in comparison. Medtronic stock was down almost 5% in late-morning trading on the stock market today , near 74. The stock had been relatively buoyant during the market sell-off, closing Monday just a few percentage points below the 52-week high hit last March.

Intercept Pharma Spikes On Report That It’s Exploring A Sale

Shares of biotech Intercept Pharmaceuticals ( ICPT ) spiked 30% in early-afternoon trading Friday on a report that the company is exploring a sale. Reuters cited anonymous sources in its report that Intercept has been working with investment bankers this week after it received interest from other companies. Reuters did not name any of the suitors, but Intercept has been a perpetual source of buyout speculation. Gilead Sciences ( GILD ) is a popular choice of buyer due to its overlapping work in liver diseases, and so are big pharmas working in that space such as Bristol-Myers Squibb ( BMY ), Johnson & Johnson ( JNJ ) and Merck ( MRK ). Intercept shares were up about 31% on the stock market today , near 123. An imminent deal would be oddly timed, however, given that Intercept’s lead drug is tied up in a long and uncertain FDA review. Initially the agency set a deadline of Feb. 29 to decide whether to approve Intercept’s obeticholic acid (OCA) for primary biliary cirrhosis (PBC). In December, however, the FDA pushed the deadline out to May 29 to provide time for an advisory committee, or adcom, to review and vote on the application on April 7. The FDA generally calls such committees when it has unresolved issues with the data. Intercept is also studying OCA for the potentially much bigger market in nonalcoholic steatohepatitis (NASH), but safety issues have arisen in its trials. “We doubt that Intercept could or would be acquired before at least an adcom panel to discuss the risk/benefit of the drug for PBC approval, and any indications of interest by an acquirer would be more to just do due diligence and explore scenarios and valuations first,” wrote RBC Capital Markets analyst Michael Yee in a research note. Yee added that an acquirer would likely have to pay up to $5 billion for Intercept but wouldn’t be able to make money off the deal for years since the drug is expected to ramp slowly. This uncertainty over the last few months has helped tamp down Intercept’s stock even more than other biotechs’, as it’s trading at only about a third of its May high of 314.88. Image provided by Shutterstock .