Novo Nordisk pullback on Lilly data likely overdone, says Deutsche Bank

Deutsche Bank analyst Tim Race noted that Novo Nordisk (NVO) shares have reacted to “strong” diabetes trial data from competitor Eli Lilly (LLY), but at first glance he thinks the move seems overdone. While a potential meaningful competitor creates a new overhang, the risk needs to be placed in to context, said the analyst, who noted the Phase 2 data will need to be confirmed in extensive Phase 3 trials before it is able to impact Novo’s growth prospects. From what he understands, Phase 3 trials would commence in 2019, suggesting a potential 2023 launch of Lilly’s LY3298176, which should give Novo time to adjust and react, Race tells investors. He maintains a Buy rating on Novo Nordisk shares.
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