Novo Nordisk shares pop after trial data exceeds expectations

Shares of Danish drugmaker Novo Nordisk soared on Tuesday, after late-stage trial data showed that its obesity drug Wegovy reduced the risk of major cardiovascular events such as heart attacks or strokes by 20%, compared with a placebo.

The results of the closely watched “SELECT” trial, which exceeded analyst expectations, were seen as a major boost for the firm’s hopes of moving beyond Wegovy’s image as a “vanity drug.”

Shares of Novo Nordisk rose nearly 16% during mid-morning deals, before paring gains. The stock was last seen trading 14% higher at 12:55 p.m. London time (7:55 a.m. ET).

The double-blind trial began almost five years ago and involved more than 17,600 adults with established cardiovascular disease who were overweight or suffered from obesity, but had no prior history of diabetes.

The headline results show that the weekly injection of semaglutide 2.4 mg achieved its primary objection of reducing the risk of cardiovascular events, such as heart attacks or strokes, by 20% compared with a placebo. Wegovy contains 2.4mg of semaglutide.

Investors and analysts had told Reuters that a risk reduction of between 15% to 17% would be interpreted as a positive result for the blockbuster weight loss drug.

Martin Holst Lange, executive vice president for development at Novo Nordisk, said that the results showed that the company’s obesity drug “has the potential to change how obesity is regarded and treated.”

“People living with obesity have an increased risk of cardiovascular disease but to date, there are no approved weight management medications proven to deliver effective weight management while also reducing the risk of heart attack, stroke or cardiovascular death,” Holst Lange said in a statement.

“Therefore, we are very excited about the results from SELECT showing that semaglutide 2.4 mg reduces the risk of cardiovascular events.”

The company said it expects to file for regulatory approvals of a label indication expansion for Wegovy in the U.S. and European Union this year.

Emily Field, head of European pharmaceuticals equity research at Barclays, told CNBC last month that the results of Novo Nordisk’s SELECT trial amounted to an important litmus test for the health industry.

In the event that the drug was found to have wider-reaching applications, including cardiovascular benefits, Field said that it was more likely that it could be adopted under mainstream healthcare policies.

Public health services “don’t want to pay for it, if it won’t tackle underlying health conditions,” she said.

The detailed results from the SELECT trial will be presented at a scientific conference later in the year, Novo Nordisk said, without fully disclosing the timeline.

— CNBC’s Karen Gilchrist contributed to this report.