Novo Nordisk (NVO +3.28%), the Danish company best known as the maker of weight loss drug Wegovy, expanded a little on the stock exchange Tuesday. The company was one of the rare enterprises seeing an increase in price on what was generally a down day for the market; it closed 1% higher, against the 1.1% decline of the bellwether S&P 500 (^GSPC +1.14%).
Thumbs up from one pundit
That gravity-defying boost was due in no small part to an analyst's note distributed before market open. UBS's Jo Walton reiterated the Swiss bank's buy recommendation on Novo Nordisk stock at a price target of 750 Danish kroner ($110) per share.
It wasn't immediately apparent why the analyst published the update. Although it's been something of an up-and-down stock so far this year, Novo Nordisk remains the pacesetter in the market for GLP-1 drugs, of which Wegovy -- indicated specifically for weight loss -- is the product most identified with the category.
Wegovy was also the first of (so far) the two obesity medications approved by the U.S. Food and Drug Administration (FDA), followed by Eli Lilly's Zepbound. In this market, first-mover advantage is powerful, however, and Wegovy is still the drug most readily associated with pharmaceutical-assisted weight loss.
NYSE: NVO
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Here comes the competition
The big question hanging over Novo Nordisk stock is how long that advantage will last. With the runaway success of this still relatively new drug category, other pharmaceutical companies and biotechs are eager to get in on the action. Already there is a very promising would-be competitor in the form of Viking Therapeutics's investigational VK2735, and similar products are under development.
