A Pharma Player in the Sweet Spot

By MoneyShow.com | April 07, 2012 AAA

This company is one of the leading pharmaceutical companies in the world, yet hardly gets the exposure it deserves, writes Nicholas Vardy of Bull Market Alert.

Novo Nordisk (NVO), a Danish pharmaceutical company that focuses on diabetes care and biopharmaceuticals, is is a quiet giant, employing 30,000 people in 76 countries.

I find the short- and long-term investment case for NVO as compelling as any idea out there. Here's why.

More than 200 million people worldwide suffer from some form of diabetes. Patients with type 1 (juvenile) diabetes can’t make insulin at all, and need to inject it their whole lives.

Type 2 diabetes—the kind you get from eating too much and not exercising—now is much more common. Today, more than 26 million Americans have diabetes, and another 79 million have pre-diabetes.

Experts calculate that by 2050, one in three American adults will suffer from the full-blown disease. And as China, India, and the rest of the emerging world adopt Western lifestyles and diets, diabetes is surging there, as well.

No wonder that the treatment of diabetes through insulin has emerged as one of the world's great growth stories. Worldwide insulin sales have quadrupled in the last decade, to $15.4 billion.

As diabetes specialist David Nathan of Massachusetts General Hospital observed, “The market for insulin is almost endless. It is going up and up and up. It is not even close to the peak.”

Today, NVO is the world’s largest insulin maker with a 50% share of the global market. Equally importantly, it has a strong research and development (R&D) pipeline of future products to treat diabetes to keep its competitors at bay.

NVO recently filed for approval of its new drugs Degludec and DegludecPlus. It has another drug for type 2 diabetes, IDegLira, in Phase 3. Five other drugs for type 2 diabetes are in earlier stages of the R&D pipeline.

All of these add up to terrific prospects for NVO in the years ahead. So buy Novo Nordisk at market and set your stop at $128.

[Obviously, great minds think alike. If you haven't yet read Jim Jubak's recommendation of Novo Nordisk, you can here—Editor.]

Subscribe to Bull Market Alert here...

Related Reading:

Will Rising Rates Kill Dividend Stocks?

A Dow Cornerstone Coming Back to Life

2 Comeback Stories with Good Yields

comments powered by Disqus
Related Analysis
  1. Market Watchers Get a Breather - Ahead of Wall Street
    Stock Analysis

    Market Watchers Get a Breather - Ahead of Wall Street

  2. Still More Gains Ahead For Semiconductor Makers
    Stock Analysis

    Still More Gains Ahead For Semiconductor Makers

  3. The Days of BABA Are Upon Us - Ahead of Wall Street
    Stock Analysis

    The Days of BABA Are Upon Us - Ahead of Wall Street

  4. Bull of the Day: Deckers (DECK) - Bull of the Day
    Stock Analysis

    Bull of the Day: Deckers (DECK) - Bull of the Day

  5. Bear of the Day: Copa (CPA) - Bear of the Day
    Stock Analysis

    Bear of the Day: Copa (CPA) - Bear of the Day

Trading Center