What happened
Investors turned up the heat on one of the hotter pharmaceutical stocks on Friday. Novo Nordisk (NVO -0.19%) saw a more than 2% bump in share price on the day, on the back of a sprawling global bank's initiation of coverage. Strong indications of heavy demand didn't hurt either.
The company's stock did much better than the sluggish S&P 500 index, which slipped by 0.1%.
So what
Well before market open, HSBC analyst Rajesh Kumar launched his coverage of Novo Nordisk stock. Mirroring the general prognosticator sentiment on the company just now, Kumar's recommendation is buy, with a price target of 1,250 Danish Kroner ($187.50) per share.
Shortly after that, a Reuters report said that supplies of the company's ultra-popular drug, weight loss treatment Wegovy, were running short in key U.S. markets. Citing responses from eight doctors throughout the country, among other feedback, that situation suggests that demand is surging for the product -- Novo Nordisk said it currently isn't experiencing interruptions to Wegovy's production and delivery systems.
Reuters added that Walgreens Boots Alliance, operator of many pharmacies in the U.S., confirmed it also experiencing shortages.
Now what
In order to try managing the situation, which has been apparent for some time, Novo Nordisk said in May it would reduce the supply of the lower-dose versions of the drug. Wegovy is available in five strengths, and the three weakest are used as a starter doses for patients. The pharmaceutical company said this would better ensure continued supplies for those currently prescribed the treatment.
