Ascendis Pharma A/S Expected To Post A Loss Of €1.74 A Share - Earnings

European equities traded in the US as American depositary receipts were moving higher late Monday morning, rising 0.35% to 1,339.76 on the S&P Europe Select ADR Index.

From continental Europe, the gainers were led by internet browser company Opera and pharmaceutical company Ascendis Pharma , which rose 4.8% and 3.3% respectively. They were followed by pharmaceutical company Novo Nordisk and internet advertising firm Criteo , which were up 2.9% and 2% respectively.

The decliners from continental Europe were led by accommodations booking company trivago and biotech firm Evaxion Biotech , which fell 2.4% and 1.8% respectively. They were followed by medical device maker Edap and telecommunications operator Telefonica , which were down 1.7% and 1.6% respectively.

From the UK and Ireland, the gainers were led by biopharmaceutical companies NuCana and Akari Therapeutics , which climbed 6.3% and 5.2% respectively. They were followed by financial services company Barclays and software firm Endava , which increased 3.6% and 2.7% respectively.

The decliners from the UK and Ireland were led by biopharmaceutical company TC Biopharm and biotech firm Trinity Biotech , which lost 5.9% and 3.7% respectively. They were followed by mining company BHP Group and biopharmaceutical company Amarin , which were off 2.8% and 2.1% respectively.

Novo Nordisk AS will report third-quarter earnings on Wednesday. Wall Street expects 88 cents in EPS and $10.49 billion in revenues when the company reports after market hours.

The stock is up 8.55% over the last year and 7.45% year-to-date.

Let’s look at what the charts indicate for Novo Nordisk stock and how the stock maps against Wall Street estimates.

Novo Nordisk Stock Chart Bearish Ahead Of Q3 Earnings

Novo Nordisk’s stock is showing strong bearish momentum, as its price of $108.76 sits below its five- 20- and 50-day exponential moving averages. This downward trend is accompanied by persistent selling pressure, suggesting potential for continued bearish movement.

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With an eight-day simple moving average (SMA) of $111.67, a 20-day SMA of $115.16 and a 50-day SMA of $123.13 — all above the current price — technical indicators point to a bearish signal for NVO stock.

Additionally, the 200-day SMA at $128.29 further underscores the bearish outlook.

The Moving Average Convergence Divergence (MACD) indicator at a negative 3.44 signals downside momentum, while a Relative Strength Index (RSI) of 25.06 indicates oversold conditions, hinting that NVO stock may face further declines without substantial support or a shift in buying interest.

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New Partnership For Longer-Acting GLP-1 Drugs

In a significant move to broaden its portfolio, Novo Nordisk has entered into a $285 million agreement with Denmark-based Ascendis Pharma AS . This partnership grants Novo exclusive worldwide rights to Ascendis' TransCon technology, aiming to develop once-monthly GLP-1 receptor agonists for Type 2 diabetes and obesity — a step up from its weekly GLP-1 drugs.

The alliance also covers cardiovascular diseases, with Novo retaining the option to expand future metabolic treatments into additional therapeutic areas. Ascendis will lead early-stage development, while Novo handles the regulatory, manufacturing, and commercial phases.

The lead program in the partnership is a once-monthly GLP-1 drug, a potential game-changer for patients with metabolic disorders. Novo's recent clinical studies underscore the broader health impact of its GLP-1 treatments, showing reduced hospital admissions for heart disease in overweight patients, boosting investor confidence in the potential cardiovascular applications of the new drug.

Novo Nordisk Analysts See 46% Upside

The consensus analyst rating on Novo Nordisk stock stands at a Buy with a price target of $123.86. The latest analyst ratings for Novo Nordisk stock from BMO Capital and Cantor Fitzgerald give an average price target of $158.67, suggesting 45.78% upside potential.

As Novo Nordisk readies to share its third-quarter performance, the dual narratives of bearish technicals and bullish analyst ratings, combined with a groundbreaking new partnership, make the upcoming earnings call a highly anticipated event.

Price Action: Novo Nordisk stock closed the trading day Monday at $109.72, down 1.98%.

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On Monday, Ascendis Pharma A/S granted Novo Nordisk A/S an exclusive worldwide license.

The pact will focus on the TransCon technology platform to develop, manufacture, and commercialize Novo Nordisk proprietary products for metabolic diseases (including obesity and type 2 diabetes) and a product-by-product exclusive license for cardiovascular diseases.

Also Read: Ascendis Pharma’s Rare Dwarfism Candidate Shows Promise In Trial, FDA Submission Expected Next Year

The agreement includes provisions requiring certain TransCon technology-based products to be identified and advanced in metabolic diseases to maintain exclusivity in the field and additional provisions for cardiovascular diseases.

Under the terms of the agreement, Novo Nordisk also receives exclusive rights to expand any resulting metabolic disease products into other therapeutic areas.

The lead program in the collaboration is a once-monthly GLP-1 receptor agonist product candidate that will initially target obesity and type 2 diabetes.

Ascendis will be eligible to receive total payments of up to $285 million in upfront, development, and regulatory milestone payments for the lead program.

In addition, Ascendis will be eligible to receive sales-based milestone payments and tiered royalties on global net sales.

For each additional metabolic or cardiovascular disease product candidate, Ascendis will be eligible to receive payments of up to $77.5 million in development and regulatory milestone payments, plus sales-based milestone payments and tiered royalties on global net sales.

Ascendis will conduct early development of TransCon product candidates in collaboration.

Novo Nordisk will be responsible for these early development costs, clinical development, regulatory, commercial manufacturing, and commercialization.

“The agreement with Novo Nordisk reflects our Vision 2030 to create value in additional large therapeutic areas outside endocrinology rare disease through collaborations with established global leaders,” said Jan Mikkelsen, Ascendis Pharma’s President and CEO.

“We look forward to working with Ascendis to explore the potential of the TransCon technology platform to reduce the dosing frequency of GLP-1 receptor agonists and other treatments for cardiometabolic diseases,” said Brian Vandahl, Senior Vice President of Global Research Technologies at Novo Nordisk.

The transaction is expected to close before the end of 2024.

Price Action: At the last check on Monday, ASND stock was up 1.91% at $127.67, and NVO stock was down 1.61% at $110.14.

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Photo by Tobias Arhelger via Shutterstock

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.