Double Dose of AI Drug Deals Fails to Give Novo Nordisk Stock (NVO) a Boost

Shares in pharmaceuticals giant Novo Nordisk (NVO) felt weaker today despite a double dose of AI drug deals.

This included Novo announcing a partnership with semiconductor group Nvidia (NVDA) to integrate AI into its drug development pipeline.

Speedier Drug Trials

Nvidia said the partnership will apply generative and agent-based AI to pharmaceutical R&D. According to Novo, the tie-up will build AI models tailored for its researchers, helping simulate and speed up early clinical trial stages.

Novo also announced that it is partnering with biotech company Deep Apple Therapeutics in a deal worth up to $812 million to develop drugs for cardiometabolic diseases, including obesity.

Deep Apple discovers drug candidates using an AI-based platform that screens billions of compounds to cut drug discovery time, the company said.

Under the deal, Novo will receive exclusive global rights to develop and commercialize so-called non-incretin oral therapies, which belong to a different class of medicines than its popular weight-loss and diabetes drugs Wegovy and Ozempic.

Weighty Matters

Despite some concerns over the safety and ethics of these types of drugs, it is a market worth chasing given that it is potentially worth around $150 billion.

There have been some concerns that Novo is losing its first-mover advantage in the weight-loss market to rivals such as Eli Lilly (LLY). Indeed, its share price is down 44% over the last 12 months.

As such, it is looking at how to spark new innovations and partnerships. Back in March, Novo signed two licensing deals and gained access to experimental obesity drugs from Lexicon Pharmaceuticals and China-based United Laboratories International.

It is likely to continue beefing up its pipeline in the months ahead.

Is NVO a Good Stock to Buy Now?

On TipRanks, NVO has a Hold consensus based on 3 Buy, 4 Hold and 1 Sell ratings. Its highest price target is $139.19. NVO stock’s consensus price target is $92.53 implying an 17.04% upside.

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