Novo Nordisk shares climbed after the U.S. Food and Drug Administration approved a new indication for the Danish drugmaker's blockbuster Wegovy medicine to treat a serious fatty liver disease.
Shares in Novo Nordisk rose as much as 5% in early European trading Monday, regaining some ground after losing more than half of their value over the past year.
The company said Friday that it received FDA approval for a new Wegovy indication as a treatment of a fatty liver disease known as metabolic dysfunction-associated steatohepatitis, or MASH, in adults with moderate to advanced liver fibrosis.
The approval comes at a challenging time for Novo Nordisk, which has seen its first-mover advantage in the obesity market eroded by rival Eli Lilly and copycat versions of its medicine, while a new experimental combination weight-loss drug proved less effective than expected in a late-stage trial. The challenges weighed on the company's share price and Novo Nordisk cut guidance twice this year and replaced its chief executive.
While Wegovy is best known as a weight-loss injection, clinical studies have pointed to benefits in other health conditions beyond obesity. The FDA also approved the drug to reduce cardiovascular events, such as heart attacks, in individuals at high risk of these. Its sister drug Ozempic, which shares with Wegovy the active ingredient semaglutide, is approved for diabetes.
"Wegovy is now uniquely positioned as the first and only GLP-1 treatment approved for MASH, complementing the already proven weight loss, cardiovascular benefits and extensive body of evidence linked to semaglutide," Novo Nordisk's Chief Scientific Officer and head of research and development Martin Holst Lange said.
Novo Nordisk said its FDA application was based on results from a late-stage clinical trial. The trial results are also the basis of the company's filings for approval in the European Union and Japan, it said.
Rival Eli Lilly said last year that a mid-stage trial showed tirzepatide--the active ingredient in its popular diabetes and weight-loss drugs Mounjaro and Zepbound--drug beat placebo in resolving MASH, with more than half of patients achieving improvement in fibrosis at 52 weeks.
About 14.9 million people in the U.S., or about 6% of the adult population, have MASH and its prevalence is expanding, according to the FDA.
Write to Adria Calatayud at adria.calatayud@wsj.com