12/28/2023 0 Comments Nova stock dividend![]() First stage of Type 2 diabetes lasts 0-5 years, in which a diet plus metformin is prescribed. In the initial stage of Type 2 diabetes mellitus, no treatment is needed, only life adjustments as weight reduction, exercise, and dietary modification are required. Diabetes TreatmentÄiabetes can be treated by several drugs. There are other companies in the diabetes field, however they are focusing mostly on small molecules (not insulin) like Merck ( MRK), J&J ( JNJ), AstraZeneca ( AZN), Boehringer Ingelheim, Takeda ( TAK) and several other players. ![]() ![]() Until 2019, Novo Nordisk, Eli Lilly and Sanofi ( SNY) were considered as three largest global manufacturers of insulin accounting for over 90% of the market in volume and value, but as Sanofi exited research from diabetes in 2019, this gave Novo further opportunity to grow. The closest peer is Eli Lilly ( LLY) which generates about half of its business from the diabetes area. As such, the company has almost no direct peers. Novo Nordisk is a 100-year-old company that until recently almost exclusively focused on diabetes treatment. And despite that, Novo is not overspending on its R&D in comparison to its peers, and at the same time it is able to generate one of the highest revenues per new molecular entity of all big pharma companies. In stark contrast to that, Novo Nordisk is the only big pharmaceutical company that until very recently was growing 100% organically. These days the trend in the pharma arena is that the main growth driver is external acquisition of competitors (M&A) and/or individual products in the form of in-licenses. The ownership structure also shields the company against diworsification as was demanded by consultancies in the period leading to the temporary slowdown in the years of 2017-2019. This is a unique asset in the pharmaceutical environment, as scientific knowledge undisturbedly accumulates through generations of scientific work without the pressure of an instant delivery. This gives Novo Nordisk a unique position among its peers, as it shields the company from potential hostile takeovers, and subsequently gives its scientists a possibility for a very long-term research horizon. It is controlled and partially owned by a majority shareholder Novo Holdings, which is owned by Novo Nordisk Foundation, a charitable foundation focusing on medical treatment and research. ![]() Why do many regard Novo Nordisk as an unusual pharmaceutical company? The company is based near Copenhagen, Denmark. While such a setting mostly bewilders outsiders, in practice it generates superior and very stable long-term returns. Its structure allows them to operate in their own way, ignoring common trends in pharmaceutical industry, operating with a very long-term horizon and a deeply specializing scientific knowledge. It specializes in a niche area of diabetes, obesity, and closely related fields. Novo Nordisk ( NVO, OTCPK:NONOF) is one of the most qualitative big pharma companies globally. Active contributors also get free access to SA Premium. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Editor's note: Seeking Alpha is proud to welcome GS Value Research as a new contributor.
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