Novo Nordisk A/S (NVO) announced that Victoza (once-daily) has received a positive opinion from The Committee for Medicinal Products for Human Use (CHMP) for the treatment of patients suffering from type II diabetes and moderate renal impairment.

Victoza is already available as an adjunct to diet and exercise for the treatment of type II diabetes for improving blood glucose control. Currently, the company is looking to expand the product’s label. A response from the European Commission should be out within the next two months.

Our Take

We are encouraged by the CHMP’s recommendation for Victoza’s label expansion and believe that chances of gaining approval are high.

Although the market for type II diabetes is crowded with products like Januvia, Janumet and Byetta, the limited availability of treatments for the combination of type II diabetes with renal impairment shows that Victoza has the opportunity to gain a wide share of the market. Already a blockbuster drug, Victoza generated revenues of 9.4 billion DKK ($1.7 billion) in the first nine months of 2014.

Once its label is expanded, Victoza can be used without dose adjustments for the treatment of patients suffering from type II diabetes as well as moderate renal impairment, which may increase the eligible patient population.

Novo Nordisk carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Allergan Inc. (AGN), AbbVie Inc. (ABBV) and Bristol-Myers Squibb Co. (BMY). While Allergan carries a Zacks Rank #1 (Strong Buy), AbbVie and Bristol-Myers carry a Zacks Rank #2 (Buy).

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