Novo Nordisk found "objectionable" bacteria in several batches of a key diabetes pill, according to a Food and Drug Administration inspection. Novo Nordisk stock slipped on Thursday.
Between February and June, seven batches of semaglutide were found to have unexpected forms of bacteria, including one the National Institutes of Health lists as a cause of meningitis. In an emailed statement to Investor's Business Daily, Novo Nordisk said the site is responsible for manufacturing diabetes pill Rybelsus, but not Novo's other semaglutide-based drugs, Ozempic or Wegovy.
"Following the FDA's inspection in July 2023, we have responded to their observations and the site is running and producing for the market," spokeswoman Allison Schneider said in an email.
In a follow-up email, FDA spokesman Jeremy Kahn said Novo responded to the agency's inspection with "information describing corrective actions."
"At this time, based on the FDA's inspections and the company's responses to the inspectional observations, the FDA does not have information that suggests ongoing compliance issues that raise concerns about the quality of drug products manufactured at the site," he said.
Still, the inspection could be bad news for Novo's semaglutide, one of its biggest drugs. Ozempic and Rybelsus are diabetes treatments, while Wegovy is the company's weight-loss drug. The company found bacteria in semaglutide batches in February, March and June, according to the FDA's inspection report.
On today's stock market, Novo Nordisk stock dropped 3.6% to 91.29.
Novo Nordisk Stock: Weight-Loss Drugs Key
Semaglutide is one of the most important medications Novo Nordisk produces.
The company is bolstering its manufacturing efforts to keep up with burgeoning demand. That includes a plant in Clayton, N.C., dedicated entirely to making Rybelsus. But the FDA notes Novo found the "objectionable organisms" on at least three occasions this year.
Further, the company hasn't established microbial controls for in-process active pharmaceutical ingredient material, according to the FDA's report.
Earlier in the week, when Reuters — citing a report from Market Wire News — reported the FDA found the objectionable conditions, Novo Nordisk stock sank 2%.
Growing Semaglutide Sales
In the second quarter, the semaglutide-based drugs generated almost 62% of Novo's total sales. The company is also testing new formulations of semaglutide and studying the drug's impact on other conditions like nonalcoholic steatohepatitis and Alzheimer's disease.
Novo also is angling for broader insurance coverage. In its highly anticipated study called Select, Novo showed patients who took Wegovy for five years had a 20% reduced risk of heart attack, stroke or other cardiovascular outcomes. Researchers conducted the study in people with obesity and heart disease, but not type 2 diabetes.
Novo Nordisk stock has a strong Relative Strength Rating of 96 out of 99, according to IBD Digital. That puts its shares in the top 4% of all stocks when it comes to 12-month performance.
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