Danish pharmaceutical giant Novo Nordisk lost 79 billion kroner in stock value within two minutes of the stock market opening this morning.
The drop was in immediate reaction to the company’s announcement on Sunday night that its two latest insulin drugs, Tresiba and Ryzodeg, were rejected in their current forms by the United States Food and Drug Administration (FDA).
The news came as a surprise as the two drugs in question had already been recommended for approval by an expert panel set up by the FDA last autumn. In addition, the drugs have already been approved for use within the EU and Japan.
“We’re disappointed and surprised at the FDA’s verdict,” Lars Rebien Sørensen, the executive vice president of Novo, told Ritzau. “But we accept the FDA’s decision and want to work closely with them to find a solution.”
Tresiba and Ryzodeg are now expected to go through testing to see whether the drugs pose an increased risk for cardiovascular disease, a process which will include 9,000 test patients and is expected to take a year. However, some analysts have warned that the drugs may not make their way to the US market for as many as five years.
The FDA’s decision is a significant blow for Novo, as Tresiba and Ryzodeg were expected to be the company’s fundamental form of income for the foreseeable future. The US market also accounts for 60 percent of Novo's $106 billion worldwide income.
The setback caused a 17 percent drop in Novo’s stock value from 1070 kroner on Friday night to 896 kroner this morning. The value has since steadied.
“We’ve seen a huge decline [in stock market value],” Sørensen told Ritzau. “And it is significant because it has so many future implications for the company.”