Novo Nordisk shares climb after positive results for anti-obesity pill
The value of the drugmaker Novo Nordisk jumped by about £9bn on Thursday after research showed that taking its new anti-obesity pill can result in almost as much weight loss as its Wegovy jab.The Danish company is racing against its US rival Eli Lilly to get a tablet treatment to market.Shares in Novo Nordisk climbed by more than 6% on hopes that it can claw back market share lost to Eli Lilly and cheaper generic versions of GLP-1 drugs.The shares had fallen by nearly 60% in the past year as sales slowed and Novo issued several profit warnings, prompting its new chief executive, Mike Doustdar, to plan 9,000 layoffs.Novo said on Thursday that a once-daily pill version of Wegovy helped people achieve “significant weight” loss in a clinical trial, with close to one in three participants losing 20% or more weight.
Side-effects were similar to the injectable version.It is the first oral GLP-1 drug submitted to the Food and Drug Administration (FDA), the US regulator, and the company expects a decision on whether the FDA will approve it for use by the end of the year.Production has already begun at Novo’s US sites.In a 64-week late-stage trial involving 307 obese or overweight adults, patients on average lost 16.6% of their body weight.
The Danish company is going head to head with Lilly’s daily weight loss pill, called orforglipron,On Tuesday, the US drugmaker said one in five people lost 20% or more of their weight over 72 weeks, in a trial of 3,127 adults,Patients lost 12,4% of their body weight on average at the highest dose,Lilly developed orforglipron with a compound it acquired from Japan’s Chugai Pharmaceutical in 2018.
Eli Lilly plans to submit the pill to the regulator for approval later this year and some analysts say it could be fast-tracked by the FDA.Analysts estimate peak sales of $10bn a year for the drug, with the investment bank Jefferies seeing potential for up to $25bn.Matthew Weston, a UBS analyst, said he saw “clear leadership” for Novo’s oral obesity pill, forecasting peak annual sales of $5bn, including $4bn in the US, where 40% of people are obese.He added: “Orforglipron still presents a threat on being a more scalable product, and therefore potentially discounted price.It also doesn’t require the 30 minutes fasting, so could be seen as a more convenient option.
”While anti-obesity jabs, which mimic a gut hormone called GLP-1, have been immensely popular, they are very expensive, especially after Lilly’s recent price increase of up to 170% in the UK,The NHS has limited their availability to people with high clinical need,Pill versions are easier to store, distribute and administer and are expected to be cheaper, paving the way for millions more people to lose weight at a time when obesity is increasing around the world,The main problem with developing a tablet version was that the peptide in semaglutide, Wegovy’s main ingredient, breaks down immediately in the acidic environment of the stomach, but Novo has added an absorption enhancer to speed its passage into the bloodstream,The shares of GLP-1 drugmakers have vastly outperformed pharmaceutical companies that do not make those weight loss drugs.
UK borrowing hits five-year high for August at £18bn
UK government borrowing rose to a five-year high in August, official figures show, fuelling growing expectations for Rachel Reeves to raise taxes at the autumn budget.Figures from the Office for National Statistics (ONS) showed public sector net borrowing – the difference between public spending and income – rose to £18bn in August, £3.5bn more than in the same month a year earlier.Dealing a blow for the chancellor as she prepares for the 26 November budget, the reading was above City predictions for a deficit of £12.75bn and forecasts from the Office for Budget Responsibility (OBR) of £12
Retail sales rise in Great Britain as warm weather boosts clothing purchases
Back-to-school shopping and warm weather helped to boost retail sales last month, according to the latest official data.Total retail sales in Great Britain rose 0.5%, the Office for National Statistics (ONS) said, as parents prepared for the new school year and shoppers enjoyed a series of heatwave and the summer’s last bank holiday.The figure was slightly higher than the 0.4% increase that some analysts had forecast
Nvidia to invest $5bn in Intel after Trump administration’s 10% stake
Nvidia, the world’s leading chipmaker, has announced plans to invest $5bn in Intel and collaborate with the struggling semiconductor company on products.A month after the Trump administration confirmed it had taken a 10% stake in Intel – the latest extraordinary intervention by the White House in corporate America – Nvidia said it would team up with the firm to work on custom datacenters that form the backbone of artificial intelligence (AI) infrastructure, as well as personal computer products.Intel shares jumped nearly 23% after markets closed, making it the largest one-day percentage gain for the company since 1987. Nvidia rose more than 3%, bolstering its $4tn market value.Nvidia said it would spend $5bn to buy Intel common stock at $23
What is quantitative tightening and how has it affected UK finances?
The Bank of England has announced that it will scale back its multibillion-pound “quantitative tightening” programme.The process is significant for the UK economy and the public finances. But how will it work?The process is the opposite of quantitative easing – the tool used by the world’s most powerful central banks during the 2008 financial crisis.Often referred to as “printing money”, QE involved central banks buying bonds from financial institutions, such as commercial banks and pension funds. This helped to push down yields – in effect the interest rate – on bonds, lowering borrowing costs and supporting economic activity
Bank’s interest rate vote and bond plans are little help to Reeves before budget
“Gradual” and “predictable” are the watchwords at the Bank of England. But for Rachel Reeves, preparing for a tough autumn budget, a more activist approach from Threadneedle Street could have helped.The central bank had two pieces of bad news for the chancellor on Thursday: borrowing costs would be left unchanged at the current elevated level, while the Bank would proceed with a plan to sell billions of pounds in UK government bonds.Both decisions had been widely expected in financial markets. But an alternative outcome was not outside the realms of possibility and could have helped bail out the Treasury a little before the autumn budget
Bank of England governor says UK ‘not out of the woods’ on inflation, after leaving interest rates on hold – as it happened
The Bank governor, Andrew Bailey, has warned that the UK is ‘not out of the woods’ in the cost of living squeeze.Announcing today’s decision to leave interest rates on hold, Bailey said:“Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.”Food prices have been a key factor pushing up inflation, and there are forecasts that food inflation will rise towards 5.5% by the end of the year.Time to wrap up…The Bank of England has left interest rates on hold at 4% and will slow the pace of its “quantitative tightening” programme in the year ahead to avoid distorting jittery government bond markets
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