Novo Nordisk In Deal With Kallyope For Obesity, Diabetes Drugs

Novo Nordisk (NYSE:NVO) announced that it has entered into a research collaboration and option agreementwith Kallyope, Inc. a privately-held New York biotechnology platform developer, with the aim of developing novel therapies for diabetes and obesity.

Per the agreement, Kallyope will receive an upfront payment and research support for activities conducted in the collaboration in addition to milestones, sales royalties and other incentives. Novo Nordisk will have the option to license up to six products on an exclusive basis.

The companies’ efforts will be focussed on the potential applications of peptides in the 'gut-brain axis.' The gut-brain axis is involved in many important aspects of physiology and plays a significant role in appetite regulation and energy homoeostasis. Kallyope has developed an innovative platform to interrogate the gut-brain axis and discover new medicines in multiple therapeutic areas.

The deal will allow Novo Nordisk to use Kallyope's unique development platform to target the gut-brain axis with novel biologics. Kallyope will contribute to the discovery process, though Nordisk will be solely responsible for any further drug development.

Novo Nordisk is known for its expertise in the discovery and development of peptide therapeutics, as well as for its commitment to and leadership in therapeutics for obesity and diabetes. Novo Nordisk’s capabilities along with Kallyope’s unique and sophisticated platform will provide for a strategic collaboration for Kallyope.

Shares of Novo Nordisk have declined 16.8% year to date compared with the industry’s decline of 4.8%.

Novo Nordisk has been enteing into agreements with various companies in order to strengthen its portfolio. In April 2018, Novo Nordisk also inked a global licence deal with biotech company EpiDestiny for sickle cell disease (SCD) program EPI01.

The inclusion of EPI01 in Novo Nordisk’s portfolio will be a boost for the company as the candidate forms part of the company’s existing biopharmaceutical business. Thus the company can enter into a new therapeutic area and also utilize their core Research and Development and commercial capabilities to make a significant difference for patients living with a serious chronic disease.

Zacks Rank & Stocks to Consider

Novo Nordisk has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the same space are Illumina, Inc. (NASDAQ:ILMN) , Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) and ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) . While Illumina sports a Zacks Rank #1 (Strong Buy), Aeglea and ANI Pharmaceuticals carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina’s earnings per share estimates have moved up from $4.60 to $4.86 for 2018 and from $5.34 to $5.61 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters with an average beat of 23.17%. The stock has rallied 30.8% so far this year.

Aeglea’s loss per share estimates have narrowed from $1.93 to $1.67 for 2018 and from $3.86 to $3.57 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 19.32%. The stock has rallied 99.6% so far this year.

ANI Pharmaceuticals’earnings per share estimates have moved up from $5.54 to $5.70 for 2018 and from $5.72 to $6.15 for 2019 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 8.69%. The stock has rallied 4.3% so far this year.

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