12 Best Biotech Stocks To Invest In According To Hedge Funds

4.  Novo Nordisk A/S (NYSE:NVO) 

Number of Hedge Fund Investors: 67

As the world’s largest supplier of diabetes care products, Novo Nordisk A/S (NYSE:NVO), a healthcare company, has approximately one-third of the global market for branded diabetic treatments. The company, which has its headquarters in Denmark, produces and distributes a range of contemporary and human insulins, injectable diabetes medications such as GLP-1 therapy, oral antidiabetic medications, and obesity treatments.

Novo has a biopharmaceutical division that makes up around 10% of its total revenue and is focused on protein therapeutics for conditions like hemophilia.

The firm promotes its products in around 170 countries and employs roughly 66,000 people across 80 countries.

Artisan Global Equity Fund stated the following regarding Novo Nordisk A/S (NYSE:NVO) in its Q1 2024 investor letter:

“In addition, shares of Novo Nordisk A/S (NYSE:NVO) rose after it reported phase 1 clinical trial results for its new experimental obesity drug Amycretin, a single molecule that operates as a GLP-1 receptor agonist, reducing one’s appetite. The new oral treatment achieved a 13.1% average weight loss after 12 weeks, more than doubling the efficacy of Wegovy for the same time span. This result also bested Lilly’s Orfoglipron, another experimental drug that achieved 5%–6% average weight loss earlier in its trials. While the Amycretin data are preliminary, investors were encouraged by the prospects of Novo Nordisk solidifying a best-in-class obesity designation, a desirable status given rising competition. In our view, Novo Nordisk has the best obesity/Type 2 diabetes pipeline in the industry, which should help protect this franchise from competition over the next 10 years.”

Strong GLP-1 sales drove a 25% increase in NVO’s revenue in the first half of 2024 compared to last year’s H1 at constant currency rates, which led the company’s management to increase full-year sales growth projections to 22%-28%.

Tresiba’s excellent profile in the long-acting insulin market has not been enough to protect it from pricing pressure in the United States, where competition from Sanofi and Lilly has increased and biosimilar insulins have dragged on category pricing since 2017.

However, the healthcare company Novo’s drug Wegovy’s outstanding performance is driving significant market expansion in the obesity treatment space, and the drug is expected to stay a dominant player until its patent expires in 2032.

Ken Fisher’s Fisher Asset Management is the largest stakeholder in the company, with 13,370,627 shares worth $1.90 billion.