Novo Nordisk (NVO) Inks Deal to Develop Heart Failure Treatment
Novo Nordisk A/S NVO announced that it has entered into a global collaboration and license agreement with Japan-based privately held company, Heartseed Inc., for the development and commercialization of the latter’s investigational cell therapy, HS-001.
Heartseed’s lead asset, HS-001, is currently being developed for the treatment of heart failure.
Per the collaboration agreement, Novo Nordisk will gain exclusive rights to manufacture and commercialize HS-001 throughout the world except in Japan, while Heartseed will retain the rights to solely develop HS-001 in Japan.
Notably, Novo Nordisk will have the rights to co-commercialize HS-001 in Japan with both companies equally sharing profit and cost in the region.
Also, Heartseed is eligible to receive up to $598 million, including an upfront payment of $55 million as well as near-term milestone payments. The company is also eligible to receive double-digit royalties on annual net sales of the product, if approved in markets outside of Japan.
Notably, Heartseed has already received approval from Japan’s Pharmaceutical and Medical Devices Agency for its Clinical Trial Application to conduct a clinical study on HS-001. The company plans to begin a phase I/II study in the second half of this year, which will evaluate the safety and efficacy of HS-001 for treating heart failure caused by ischemic heart disease, in Japan.
Shares of Novo Nordisk have rallied 13% so far this year compared with the industry’s increase of 5.7%.
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The above deal looks to be a good strategic fit for Novo Nordisk as the company is aiming to pioneer novel treatment solutions for people with cardiovascular disease.
Notably, Novo Nordisk, which has a strong presence in the Diabetes Care market, has one of the broadest diabetes portfolios in the industry. However, we are encouraged by the company’s efforts to develop new treatments. The company is also actively pursuing acquisitions to boost the portfolio.
In June 2020, Novo Nordisk acquired AstraZeneca Plc’s AZN spin-off, Corvidia Therapeutics, for an upfront payment of $725 million. With the acquisition, the company seeks to expand its presence across a range of cardiometabolic diseases that are closely linked to its core business within diabetes and obesity.
Zacks Rank & Stock to Consider
Novo Nordisk currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Bayer Aktiengesellschaft BAYRY and Zoetis Inc. ZTS, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bayer’s earnings estimates have been revised 4% upward for 2021 and 5.8% upward for 2022 over the past 60 days. The stock has increased 8% year to date.
Zoetis’ earnings estimates have been revised 1.5% upward for 2021 and 1.6% upward for 2022 over the past 60 days. The stock has risen 6.7% year to date.
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