Novo $3.1 Billion Takeover Bid

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Novo Nordisk sign board in front of Head Office

Danmark-based drugmaker Novo Nordisk [NYSE: NVO] made a takeover offer of 2.6 billion-euro ($3.1 billion) bid for Belgium’s Ablynx [OTC: ABLYF], to beef up its lesser-known blood-disorder unit and rekindle growth.

NVO, a global leader in the diabetes market, hormone replacement therapy and obesity, offer signals a higher need for medications that target rare diseases. The most promising is Ablynx’s caplacizumab  which is poised for approval this year for an unusual disorder in which blood clots form in small vessels throughout the body.

Novo stock price rose by 49.3% in comparison to the industry’s gain of 15.2%. The Ablynx stock has almost doubled since the beginning of 2017.

The takeover proposal comes as Novo faces increased competition in diabetes. Though the market for drugs is enormous, around $40 billion in sales, generic drugs remains a threat.

With that said, we remain bullish on NVO as our outlook remains positive.

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