The successful outcome of Novo Nordisk’s clinical trial for its kidney failure treatment had a significant impact on the stock prices of a German kidney dialysis service company. On Wednesday, Fresenius Medical Care (FME, -17.88% FMS, +0.92%) witnessed a sharp decline, with their shares plummeting by as much as 24%. Additionally, shares of their parent company, Fresenius (FRE, -11.71%), experienced a drop of up to 13%. This decline followed Novo Nordisk’s decision to prematurely halt a trial involving semaglutide, a drug used to treat individuals with type 2 diabetes and chronic kidney disease, due to its remarkable efficacy.
Conversely, Novo Nordisk’s stock (NOVO.B, 3.32% NVS, +0.90%) saw a positive response in the Copenhagen trading market, surging by 4%. Notably, Novo Nordisk holds the position of being the second-largest company in Europe by market capitalization, trailing behind only Nestle as of that day.
Analysts at Citi, led by Veronika Dubajova, pointed out, “We see kidney disease as one of the areas where GLP-1s could potentially negatively impact the size of the relevant patient population over time. The early termination of the FLOW trial indeed suggests such an impact; it also indicates a somewhat faster effect than we had previously anticipated.”
The term “GLP-1” refers to a class of drugs used in the treatment of diabetes and weight loss. Eli Lilly (LLY, +1.32%) is also in the process of developing similar drugs in clinical trials, and these two companies are expected to dominate the market in this category.
Novo Nordisk’s Ozempic is a specific GLP-1 drug designed for patients with type 2 diabetes. The trial involved 3,534 individuals with type 2 diabetes, with a median age of nearly 67 years, and approximately two-thirds of them were at a very high risk of experiencing progression in chronic kidney disease.
Novo Nordisk has chosen to remain blinded to the trial results until its completion, which is anticipated in the first half of 2024.