Shares of Novo Nordisk (NVO 2.61%) are up on Tuesday. The company's stock gained 3.9% as of 2:40 p.m. ET today and was up as much as 4.5% earlier in the day. The move up comes as the S&P 500 and the Nasdaq Composite each rose 0.7%.
The pharma giant reached a deal with telehealth providers to offer its blockbuster GLP-1 drug Wegovy through their platforms.
Novo Nordisk will partner with digital providers
Novo Nordisk announced its decision to partner with digital health providers to streamline access to Wegovy after a U.S. shortage has eased. And Novo will offer direct-to-consumer access via its NovoCare online pharmacy, where customers can buy it at a discounted price of $499 per month.
Betting on convenience
This is an effort to capture a large number of consumers who flocked to telehealth platforms to access compounded versions -- essentially generics made by third parties -- after a shortage allowed the platforms to do so. By partnering with well-known telehealth companies, Novo Nordisk is aiming to reclaim market share and build patient loyalty, even if it likely means slimmer margins on what it sells through them.
NYSE: NVO
Key Data Points
Dave Moore, executive vice president of U.S. operations at Novo Nordisk, told reporters that "We felt it was really important to work hard to establish a collaboration with telehealth companies" in order to "sort of catch people as they come off of compounded medicines."
Trade tensions could hurt the company's bottom line
I think this is a smart move that will allow the company to better compete in the uber-lucrative GLP-1 space. It shows the company can adapt, meeting customers where they are.
However, it is facing increasing competition from its rivals, and the ongoing trade war could impact the company's margins. I would hold off for now until trade tensions are resolved or more clarity emerges.
