Viking Rises After 'Competitive' Efficacy, Safety Data From Oral Weight-Loss Drug

Novo Nordisk NVO is expected to beat estimates when it reports third-quarter 2024 results on Nov. 6, before the opening bell. The Zacks Consensus Estimate for quarterly revenues in the to-be-reported quarter is pegged at $10.68 billion, while the same for earnings is pinned at 90 cents per share.

In the past 60 days, the Zacks Consensus Estimate for Novo Nordisk’s 2024 earnings per share (EPS) declined from $3.19 to $3.07. During the same time frame, the company’s 2025 EPS forecast has declined from $4.34 to $4.18.

NVO Estimate Movement

NVO’s Earnings Surprise History

NVO’s performance has been mixed over the trailing four quarters, with earnings beating estimates in three quarters and missing the mark once. On average, Novo Nordisk registered an earnings surprise of 3.18% in the last four quarters. In the last reported quarter, the company reported a negative surprise of 8.45%.

Earnings Whispers

Our proven model predicts an earnings beat for Novo Nordisk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Novo Nordisk has an Earnings ESP of +1.02% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Factors Shaping NVO’s Upcoming Results

NVO operates under two segments — Diabetes and Obesity Care and Rare disease. Revenue growth in the third quarter of 2024 is expected to have been driven primarily by the strong demand for NVO’s diabetes and obesity care medicines, especially semaglutide. Notably, semaglutide, a GLP-1 agonist, is approved as an Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes (T2D) and as a Wegovy injection for weight management.

Wegovy is likely to have been the key top-line contributor for Novo Nordisk in the to-be-reported quarter on the back of strong prescription trends. Wegovy’s label was expanded in the United States in March 2024 to reduce the risk of serious heart problems in obese/overweight adults, which has been boosting its sales. The drug’s label was also recently expanded in the EU for the same indication. The company is also looking to expand the drug’s label to treat patients with obesity-related heart failure with preserved ejection fraction in the EU and U.S. markets.

Ozempic sales are likely to have increased in the to-be-reported quarter as well based on the trend witnessed in the past few quarters, fueled by rising demand. Quarterly revenues from sales of Rybelsus, Victoza (also for T2D) and fast-acting insulin, Fiasp, are likely to have put up a strong performance in third-quarter 2024, contributing to the top line.

Novo Nordisk’s revenues under the Rare Disease segment are likely to have declined in the to-be-reported quarter, mainly due to lower sales of its hemophilia A products. However, sales of hemophilia B products are expected to have increased year over year.

Novo Nordisk faces serious competition from Eli Lilly LLY in the diabetes and obesity care market space. Lilly has seen unparalleled success with tirzepatide, a dual GIP and GLP-1 receptor agonist, which is marketed as Mounjaro for T2D and Zepbound for obesity. While other biotech firms, such as Amgen AMGN and Viking Therapeutics VKTX, are also making rapid progress with their GLP-1-based diabetes/obesity candidates, we believe that they will take time to catch up with NVO.

NVO’s Price Performance & Premium Valuation

The stock has gained 8.2% in the year-to-date period compared with the industry’s 14% growth. NVO has also underperformed the S&P 500 while outperforming the sector in the same period, as seen in the chart below.

NVO’s Mixed Year-To-Date Stock Performance

The broad market exchange-traded fund SPDR S&P 500 ETF Trust was up 0.2% and the actively traded Invesco QQQ Trust was 0.1% higher in Monday's premarket activity as investors focus on the US presidential elections and Federal Reserve policy meeting.

US stock futures also edged higher, with S&P 500 Index futures up 0.1%, Dow Jones Industrial Average futures advancing 0.01%, and Nasdaq futures gaining 0.1% before the start of regular trading.

The factory orders report for September will be released at 10 am ET.

In premarket activity, bitcoin was marginally up by 0.02% and the cryptocurrency fund ProShares Bitcoin Strategy ETF was 0.7% lower.

Power Play:

Industrial

Industrial Select Sector SPDR Fund was flat while the Vanguard Industrials Index Fund increased 1.1% and the iShares US Industrials ETF was inactive.

Air Transport Services Group stock was up more than 24% before the opening bell after Reuters reported Sunday, citing unnamed sources, that the company is in advanced talks to be acquired by Stonepeak for around $3.1 billion.

Winners and Losers:

Energy

The iShares US Energy ETF was flat, while the Energy Select Sector SPDR Fund was up by 0.9%.

Centrus Energy shares were down more than 13% before the opening bell after the company said it plans to offer $350 million in convertible senior notes due 2030.

Financial

Financial Select Sector SPDR Fund lost 0.2%. Direxion Daily Financial Bull 3X Shares was down 0.4%, while its bearish counterpart Direxion Daily Financial Bear 3X Shares was 0.4% higher.

B. Riley Financial-backed stock was down nearly 8% pre-bell after the company reported that the Franchise Group, which B. Riley funds, had started voluntary Chapter 11 proceedings in the US Bankruptcy Court for the District of Delaware.

Consumer

The Consumer Staples Select Sector SPDR Fund was down 0.1%, while the Vanguard Consumer Staples Fund was up 0.7% The iShares US Consumer Staples ETF was inactive, and the Consumer Discretionary Select Sector SPDR Fund lost 0.2%. The VanEck Retail ETF was inactive, while the SPDR S&P Retail ETF retreated 0.7%.

Yum China Holdings shares were up more than 7% pre-bell after the company reported higher Q3 earnings and revenue.

Health Care

The Health Care Select Sector SPDR Fund retreated 0.1%. The Vanguard Health Care Index Fund gained marginally by 0.02% while the iShares US Healthcare ETF was inactive. The iShares Biotechnology ETF was down 0.2%.

Viking Therapeutics stock was up more than 7% premarket after the company reported new positive clinical data from two studies on its VK2735 product candidate for the treatment of various metabolic disorders.

Technology

Technology Select Sector SPDR Fund advanced 0.3%, and the iShares US Technology ETF was 0.2% higher, while the iShares Expanded Tech Sector ETF was inactive. Among semiconductor ETFs, SPDR S&P Semiconductor ETF increased by 0.3%, while the iShares Semiconductor ETF rose by 0.2%.

Nvidia shares were up nearly 2% in recent Monday premarket activity after S&P Dow Jones Indices said Friday that the company would replace Intel in the Dow Jones Industrial Average effective Nov. 8. Intel shares were down 1.3% pre-bell.

Commodities

Front-month US West Texas Intermediate crude oil rose nearly 3% to $71.55 per barrel on the New York Mercantile Exchange. Natural gas fell 1.7% to $2.62 per 1 million British Thermal Units. United States Oil Fund was up 3%, while the United States Natural Gas Fund lost 1.6%.

Gold futures for December advanced 0.1% to $2,751.30 an ounce on the Comex, while silver futures gained 0.8% to reach $32.93 an ounce. SPDR Gold Shares increased by 0.3%, and iShares Silver Trust was 1.3% higher.

Viking Therapeutics Inc announced that new clinical data from the company’s VK2735 obesity program were highlighted in two poster presentations at ObesityWeek 2024.

Viking is evaluating both subcutaneous and oral formulations of VK2735 in clinical trials.

Highlights from one poster presentation include new data from the Phase 1 multiple ascending dose (MAD) trial of an oral tablet formulation of VK2735 dosed daily for 28 days, including results for the study’s 60 mg, 80 mg, and 100 mg daily treatment cohorts.

Cohorts receiving VK2735 demonstrated dose-dependent reductions in mean body weight from baseline, ranging up to 8.2%.

Cohorts receiving VK2735 also demonstrated reductions in mean body weight relative to placebo, ranging up to 6.8%.

At follow-up visits through Day 57, persistent weight loss effects were observed, ranging up to 8.3% from baseline four weeks after the last dose of VK2735 was administered.

An exploratory assessment of the proportion of subjects achieving at least 5% weight loss after 28 days demonstrated that up to 100% of VK2735-treated subjects achieved ≥5% weight loss, compared with 0% for placebo.

A second poster presentation highlights follow-up results from the company’s Phase 2 VENTURE trial of VK2735.

As previously reported, patients receiving weekly doses of VK2735 demonstrated statistically significant reductions in mean body weight after 13 weeks, ranging up to 14.7% from baseline.

Statistically significant differences compared to baseline and placebo were observed for all doses starting at Week One and continuing throughout the 13-week treatment period.

Reductions in body weight were progressive throughout the study, with no plateau observed for weight loss at 13 weeks. In addition, up to 88% of patients in VK2735 treatment groups achieved ≥10% weight loss, compared with 4% for placebo.

The results also showed that all cohorts receiving VK2735 maintained most of their weight loss four weeks after receiving the final dose of VK2735 in the study.

An exploratory analysis of changes in diabetes status was also performed, demonstrating that treatment with VK2735 increased the odds of patients with prediabetic status at baseline shifting to normoglycemic (non-diabetic) status over the 13-week treatment period.

Similarly, the proportion of patients with normal glycemic status at baseline transitioning to prediabetic status favored VK2735, with approximately 31% of placebo patients transitioning to prediabetic status, compared with 2% among patients receiving VK2735.

Oral VK2735 continued to demonstrate encouraging safety and tolerability following 28 days of once-daily dosing at doses up to and including 100 mg.

Price Action: VKTX stock is up 5.65% at $77.00 during the premarket session at last check Monday.

Photo via Shutterstock

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