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Novo Nordisk shares surged over 10% Thursday to a record high.
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The Danish drugmaker saw its global market cap ranking rise to 12th, cruising past Tesla.
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The stock jumped after the company shared an update on a new obesity drug.
Shares of Novo Nordisk rocketed more than 10% on Thursday, pushing past Tesla‘s market valuation following an update from the drug maker on a new obesity drug.
Shares of the pharmaceutical company were trading at $137.12 shortly before noon in New York. The stock hit an all-time high of $138.27 earlier in the day. The jump pushed the Danish company’s market capitalization to about $613 billion, jumping past Tesla’s $565.5 billion valuation to claim the 12th spot on the list of most valuable global companies.
Investor optimism was driven by Novo Nordisk’s reveal on Thursday that a Phase I trial of the pill version of the experimental drug amycretin showed participants lost 13.1% of their weigh after 12 weeks.
The early data suggests that new drug may outclass the effectiveness of Novo Nordisk’s hugely popular obesity drug, Wegovy, which boasts a weight loss of about 6% after 12 weeks and 15% after 68 weeks.
The Danish drug manufacturer is riding a wave of investor enthusiasm for GLP-1 obesity drugs. With the US obesity rate at about 40%, according to the Centers for Disease Control and Prevention, the total addressable market for such weight loss drugs is massive. Last week, Bank of America analysts said Eli Lilly could see its stock surge 30% on sales of its obesity drug, which the bank said could produce $60 billion in sales for the company in coming years.
According to Goldman Sachs, the global market for anti-obesity drugs will soar to $100 billion annually by 2030, a substantial leap from $6 billion.
JPMorgan’s analysts said this week that retail traders had shifted focus to pharma stocks, dumping most Magnificent Seven names in the last week.
Tesla – the Magnificent 7’s weakest link in 2024 — has seen its stock plunge 28% year-to-date as weakening sales in China and a cloudier outlook for electric vehicle demand in the US drive a sell-off.
Read the original article on Business Insider