(Reuters) - Novo Nordisk A/S’s closely watched diabetes drug semaglutide is effective, caused no heart risk, and carried only limited risk of sight problems, a preliminary review by the U.S. Food and Drug Administration concluded on Monday, sending the company’s shares up 4 percent.
The review, posted on the FDA’s website, comes two days ahead of a meeting of advisors to the agency who will discuss the drug, semaglutide, and recommend whether it should be approved. The FDA typically follows the recommendations of its advisors.
Seamus Fernandez, an analyst at Leerink, said the FDA’s comments “suggest a clear path to a timely approval.”
Novo Nordisk is hoping that semaglutide, a once-weekly injection, will take market share from Eli Lilly & Co’s once-weekly Trulicity, which in turn has been taking share from Novo Nordisk’s once-daily Victoza.
All three drugs belong to a hotly contested class known as glucagon-like peptide-1 (GLP-1) analogs, which imitate an intestinal hormone that stimulates the production of insulin and lowers blood sugar.
Data showed semaglutide reduced blood sugar better than Trulicity, known also as dulaglutide, and led to greater weight loss. Semaglutide also proved superior in reducing blood sugar than a range of other drugs, including Merck & Co’s Januvia and AstraZeneca Plc’s Bydureon.
The FDA’s review analyzed clinical trial data showing more patients taking semaglutide developed complications associated with diabetic retinopathy, a condition that can cause blindness.
But the FDA’s opthalmic reviewer concluded that “to the extent that the increased incidence in progression of retinopathy is real in this program, it does not raise any ophthalmic concerns.”
The reviewer’s comments came as a relief to investors.
“The primary reason the stock is up is because there was significant concern on retinopathy and the document reads somewhat favorably,” said Wimal Kapadia, an analyst at Bernstein.
Novo Nordisk is relying on semaglutide to accelerate sales growth, which has slowed amid increased competition for its products in the United States.
Global annual sales of semaglutide are expected to reach $3.17 billion by 2023, according to Thomson Reuters data. Danske Bank analysts estimate they will account for 32 percent of Novo Nordisk’s sales by 2025.
The company is testing an oral version of semaglutide as well as a higher-dose version for weight loss.
Reporting by Toni Clarke in Washington; Editing by Bernadette Baum