Novo Nordisk stock popped Wednesday after the Danish drugmaker inked a deal worth up to almost $2.7 billion that bolsters its efforts in diabetes and obesity treatment.
The company will partner with privately held Aspect Biosystems. Aspect is an expert in bio-printing tissues. Novo has experience in stem cell differentiation and cell therapies. Together, they plan to create bio-printed tissues to replace, repair or supplement biological functions. Aspect will receive $75 million up front and up to $650 million per product in future milestones. The companies will develop up to four products.
The partnership builds on Novo Nordisk's extensive efforts in diabetes and obesity treatment. Novo makes the only approved obesity drugs, Saxenda and Wegovy. Also, its diabetes injection Ozempic has gained a cult following for its weight-loss properties.
On the stock market today, Novo Nordisk stock jumped 3.3% to close at 163.52.
Novo Nordisk Stock Heats Up
The collaboration will first focus on developing bio-printed tissues that help maintain normal blood sugar levels, a key component in treating diabetes.
Novo says the treatments will be allogeneic, meaning they come from a single source. This will make mass manufacturing a possibility. In many cases, however, these treatments struggle as the body will often reject donor tissue. Novo says the companies hope their treatments won't require immune system-suppressing drugs.
The news comes at a key time for Novo Nordisk stock, which trades at a record high on enthusiasm for its obesity treatments. Meanwhile, competitors like Eli Lilly, Amgen and Viking Therapeutics trail with similar efforts to prompt weight loss.
Lilly shares are forming a cup base with a buy point at 346.73, according to MarketSmith.com. Amgen stock is involved in a lengthy consolidation with an entry at 296.77.
Neither Viking nor Novo Nordisk stock is forming a base. But both are highly rated. Novo stock has a strong IBD Digital Relative Strength Rating of 95, putting it in the top 5% of all stocks when it comes to 12-month performance. Viking's RS Rating is a perfect 99.
Editor's Note: This story has been updated to correct the overall value of the deal.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
