Why Novo Nordisk Stock Jumped a Lucky 7.7% Today

Finally, some good news for Novo Nordisk (NYSE: NVO) shareholders!

Twice in the past two months, the Danish manufacturer of GLP-1 drugs for weight loss and diabetes treatment has reported clinical trial results for refinements of its original Ozempic and Wegovy drugs. Twice in the past two months, investors have been disappointed by the numbers -- 22.7% average weight loss over 68 weeks for CagriSema, and 20.7% weight loss for a 72-week regimen of semaglutide 7.2 milligram (mg).

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On Friday, however, Novo Nordisk announced top-line results in yet another trial. While the results don't initially sound as good as those in the trials cited above, however, the speed at which they were achieved has investors cheering, and Novo Nordisk stock is up 7.7% through 10:50 a.m. Friday morning.

What Novo Nordisk announced

Novo Nordisk describes its latest work as "a phase 1b/2a clinical trial with amycretin, a unimolecular GLP-1 and amylin receptor agonist intended for once weekly subcutaneous administration." (Which is to say, you take a shot once a week.)

Studied over 36 weeks, in doses from 1.25 mg to 20 mg, patients taking amycretin experienced only "mild to moderate" gastrointestinal side effects, says Novo, and in exchange enjoyed a 9.7% average reduction in body weight.

That's a pretty big change in a pretty short time, roughly half as much time as the semaglutide 7.2 mg study for half as much weight loss, and Novo Nordisk says it is "very encouraged" by this outcome. Based on the results, Novo says it is "planning further clinical development of amycretin."

Is Novo Nordisk stock a buy?

Admittedly, we're talking about an early-stage trial here, basically halfway along the trek from phase 1 to phase 3. Still, the results seem to be encouraging investors. And there's another thing they might find encouraging: At 27.4 times earnings today, Novo Nordisk stock costs barely one-third the P/E ratio of Novo's closest competitor in GLP-1 weight loss drugs, Eli Lilly (NYSE: LLY). If you're looking for a cheap weight-loss stock, Novo Nordisk stock is it.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.