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Investors see big Novo stock boost if weight-loss drug Wegovy shows heart benefit


Positive trial data showing Novo Nordisk’s obesity drug helps save and extend lives, not just lose weight, could propel Europe’s best-performing stock even higher, according to 10 investors and industry analysts interviewed by Reuters.
Demand for the Danish company’s weight-loss treatment Wegovy is soaring in the United States, leading it to significantly raise its full-year profit and sales expectations last month.

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But Novo faces challenges in getting broad health insurance coverage from European governments as well as insurers, and the US Medicare health plan for older Americans that classifies weight-loss treatments as lifestyle drugs.
Showing a clear medical benefit in addition to weight loss could change that.
“It doesn’t take a lot of leaps of faith to understand if you lose weight, you will have a lower risk of heart disease,” said Jeff Elliott, lead health care portfolio manager at BMO Global Asset Management, and a Novo shareholder.
“But most insurance companies (…) may need to see that data, to definitively see the correlation between weight loss and improved outcomes.”
Novo launched a large-scale study involving 17,500 patients almost five years ago to assess whether Wegovy reduces the risk of major cardiovascular events like strokes or heart attacks in overweight or obese people with a history of heart disease.
It has said it expects results between June and August, though analysts and investors will be looking for any signals on the out-come when Novo releases quarterly earnings on Thursday.
The company declined to comment for this story citing its quiet period ahead of quarterly results.
Barclays analysts reckon a positive outcome from the study, called SELECT, could boost uptake of Wegovy by a quarter by 2030 if the drug is approved for expanded use for treating cardio-vascular conditions.
Investors, including BMO and AllianzGI, said a reduction in the risk of a major cardiovascular event like a stroke of 17 percent or more would be considered a positive result which would likely boost Novo’s shares.
Less than 15 percent could put downward pressure on the stock while around 10 percent would be a major disappointment, some of the investors and analysts said.
A 20 percent risk reduction could boost the stock to as high as 1,500 Danish crowns ($220), a third higher than its current
price, Barclays said, while failure could see it fall to 900.
In an informal poll of six analysts by Reuters, two agreed with Barclays’ prediction that shares could be up by a mid-
single-digit percentage if the trial shows a risk reduction of 17 percent. Four see a more muted reaction, saying they expected shares to rise only by a low-single-digit percentage.
Some said the trial’s importance has been overhyped. “The trial will give important data, but it won’t give all the answers in one go and won’t blow the doors open for reimbursement,” said UBS analyst Michael Leuchten.

$100 billion market

The stock’s 140 percent rally since Wegovy’s US launch in June 2021 may limit the immediate upside for the shares too.
Worth more than 340 billion euros ($372.91 billion), Novo overtook Nestle in March to become the second most valuable company on the pan-European STOXX 600 index after luxury goods group LVMH. Its shares are up more than 20 percent this year.
Barclays estimates the global market of weight-loss therapies could be worth as much as $100 billion in the next 10 years, with most of the benefit accrued to early leaders, Novo and Eli Lilly.
Booming demand and production issues have caused shortages of Wegovy though, forcing Novo to delay launching the weekly injection in most of Europe.
Even with the medical benefit, investors say the company faces a challenge convincing Europe’s cost-conscious health authorities to pay for the drug. It costs nearly $1,350 a month in the United States.
In Europe, it is only available in Norway and Denmark, where it costs between $160 and $350 per month without reimbursement from private insurers.
The countries’ public health authorities have said they will recon-sider their assessments of whether to cover the drug, which they currently do not, after publication of the SELECT trial data.
But in an indication of the hurdles, Denmark’s largest private insurer announced last week it will stop reimbursements from next January.
“What we have seen in Denmark with some providers already coming out and saying ‘we can’t do this for everybody’ will happen elsewhere and will add some volatility,” said Lars Skovgaard Andersen, investment strategist at Danske Bank.

Read more:

What are the different weight-loss drugs? Ozempic, Wegovy, and a ‘miracle cure’ plant
Weight loss injection Wegovy to be offered through UK’s NHS soon
The new Ozempic? Scientists hail new miracle fat-busting weight loss supplement

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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