DaVita stock launched into a profit-taking zone Tuesday after Novo Nordisk said its weight-loss drug reduced the risk of death for chronic kidney disease patients by 24%.
Last year, Novo said it stopped the study, dubbed Flow, almost a year early after meeting the bar for success much earlier than expected. At the time, DaVita stock took a nearly 17% hit. DaVita operates dialysis centers, which treat patients with chronic kidney disease.
But on Tuesday, Novo unveiled the exact metrics of the highly anticipated study. The results suggest weight-loss drugs won't undermine the need for dialysis machines.
DaVita stock jumped 7.1% to 134.65. Shares of fellow dialysis company Fresenius Medical Care also popped 11.2% to 20.76. Novo Nordisk stock, on the other hand, fell 2.6% to 124.65. DaVita stock is close to its previous record high of 136.48, achieved in mid-2021.
In patients with type 2 diabetes and chronic kidney disease, a weekly dose of semaglutide cut the risk of death due to kidney or cardiovascular complications by 24%. Compared to placebo recipients, the semaglutide group also had a lower risk that their kidney disease would worsen.
DaVita Stock Extends Its Breakout
The news sent DaVita stock into a profit-taking zone, which runs from 133.76 to 139.31. Shares broke out of a cup-with-handle base on Feb. 1, MarketSurge.com shows.
Novo Nordisk is now planning to ask the Food and Drug Administration to approve semaglutide — which sells as a weight-loss drug called Wegovy and in diabetes treatment as Ozempic — for patients with type 2 diabetes and chronic kidney disease.
"We are very excited about the results from Flow showing that semaglutide 1.0 milligrams reduces the risk of kidney disease progression," Martin Holst Lange said in a statement. Lange is Novo's executive vice president for development.
He noted about 40% of people with type 2 diabetes also have chronic kidney disease. If approved, semaglutide would be the first drug in its class, GLP-1 agonists, to gain approval for this use. Novo's chief rival is Eli Lilly with its drug, tirzepatide.
This story has been corrected to reflect DaVita's operations.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
