Ozempic has the potential to add additional indications over the next few years.
Novo Nordisk (Norbo -0.88%) The company has become one of the world’s most valuable healthcare stocks thanks to its diabetes treatment and weight loss drug Ozempic. But the challenge for investors and analysts is predicting how much revenue it will bring in at its peak. As new research on the drug emerges, new potential benefits associated with Ozempic use are being discovered.
Recently, new research has come out about Ozempic that could be a big opportunity for the drug, and it could mean billions of dollars in additional revenue for the pharmaceutical company. Healthcare companies.
Ozempic may have many positive effects on the brain
Ozempic and other glucagon-like peptide 1 (GLP-1) drugs are so effective at suppressing people’s appetite that researchers wonder how they affect the brain.
GLP-1 drugs Negatively Research showing its effect on the brain has raised optimism that Ozempic may have a positive effect, particularly when it comes to the drug: A recent study analyzing electronic health records found a 48% reduction in dementia with Ozempic compared with the diabetes drug Januvia. MerckIt’s important to note that this was an analysis of health records, not a clinical trial. While this does not result in any additional indications for Ozempic, it is worth noting that Novo Nordisk is conducting clinical trials (phase 3) testing the effectiveness of semaglutide as a treatment for Alzheimer’s disease.
The brain-related benefits may go beyond dementia and Alzheimer’s disease: Scientists have found promising trends that suggest GLP-1 drugs such as Ozempic may help reduce alcohol-related cravings, making them potentially effective treatments for substance abuse.
It’s still early days, but investors should keep a close eye on these developments.
Clinical trials, especially those involving dementia and Alzheimer’s disease, can take a long time to track and study. While early results and indications are promising for Ozempic, and possibly other GLP-1 drugs, investors shouldn’t jump to conclusions just yet.
But it’s worth considering this when deciding to invest in Novo Nordisk, because while the company’s shares may look expensive, trading at more than 46 times earnings, Past profits — With the potential for more indications for Ozempic and Wegovi in the coming years, the company’s shares may still look like a bargain over the long term. Rivals Eli Lilly The company recently won approval for its early-stage Alzheimer’s drug, Kisunra, which could generate $5 billion in revenue at its peak. If Ozempic can get approval for an Alzheimer’s drug, the company’s sales could easily increase by billions.
Ozempic brought in roughly $13.4 billion in revenue for Novo Nordisk last year, a 60% year-over-year growth rate. Demand for Ozempic remains strong, and as more indications are added, there’s plenty of room for the drug to generate additional revenue for the company in the future.
Investors who are hesitant to buy Novo Nordisk’s stock because of its valuation should consider the possibility that the stock could rise in the long term. Any new signals regarding Ozempic could lead to further analyst upgrades, which could make the stock even more bullish.
Should you buy Novo Nordisk without any hesitation?
Novo Nordisk is a leader in diabetes care and weight loss, and is exactly the type of company that could be a great investment for anyone looking to get into the obesity prevention market.
While it may be tempting to invest in emerging stocks with much lower valuations and potentially greater upside potential, there is less risk in investing in established healthcare companies like Novo Nordisk. Innovation in weight loss and diabetes medications is at the core of the company’s business, which is why I believe it remains one of the best healthcare stocks to buy. Even with the premium price tag, it’s well worth it.
David Jagielski The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Merck. The Motley Fool recommends Novo Nordisk. The Motley Fool recommends: Disclosure Policy.
