Why Is Novo Nordisk Hitting Records With Its Stocks?

Stocks can rise and fall for various reasons throughout the year, but there’s one company that’s really been riding the high in recent months. That’s right: Novo Nordisk. While people might not have necessarily heard of the company, there’s a good chance they might know of their leading product right now: Ozempic.

The start of a new year usually sees the weight loss industry boom, but Novo Nordisk has been growing in popularity since last year, largely thanks to the number of celebrities who were linked to the product. So, why is Novo Nordisk hitting records with its stocks? It turns out deals are the main reason.

Novo Nordisk has signed some major deals already in 2024

As the market leader when it comes to weight loss medication, Novo Nordisk is no stranger to being at the top end of the scale. However, the start of January 2024 marked something new for the company as it has since signed agreements with two American biotech firms. The deals are all a part of the partnership Novo Nordisk has formed with Flagship Pioneering. As a part of the partnership, Novo Nordisk will reimburse each of the companies for any development and research costs, offer royalties, and pay as much as $532 million in upfront and milestone payments.

One collaboration will see Novo Nordisk work toward obesity treatment

One of the collaborations on the way for Novo Nordisk is with Omega Therapeutics, a Massachusetts-based company. The idea is to develop a treatment for obesity by boosting someone’s metabolic activity through thermogenesis, aka the body’s natural ability to create heat and raise body temperature. When news of the collaboration broke, Omega’s shares jumped by over 100%, although they have since fallen.

Another collaboration will target issues with the liver

Another separate collaboration on the way for Novo Nordisk is with Cellarity, a privately held company that is aiming to treat a certain liver condition. The condition in question is metabolic dysfunction-associated steatohepatitis, which is inflammation of the liver caused by the storage of excess fat. Apparently, the pair is working toward creating a small molecule therapy to try to combat the condition.

Novo Nordisk’s shares set a record high in 2024

Ozempic and Wegovy were just about everywhere we turned in 2023, and that was largely thanks to the number of celebrities who were allegedly using the medication. Although it was primarily designed to help people with diabetes, the medication is also known for its weight loss properties, with plenty of people across the world investing in the stuff to try and shift extra pounds. The popularity of the medication led Novo Nordisk to see its stocks up over 50%, but all of that was blown out of the water by the company’s latest deals, with shares reaching $108 in January 2024.

Why is Novo Nordisk hitting records with its stocks? Simply put, it’s all thanks to the company’s latest deals. However, this comes on the tail of Novo Nordisk’s incredible run throughout 2023, which really shook up the weight loss market.