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Diabetes: Does Novo Nordisk Signal Big Developments?

Novo Nordisk , the world's biggest diabetes drug company, is very lightly traded on the New York Stock Exchange, but check out the move in the stock today. Coincidentally, on the day that The New York Times runs a front-page story (with two jump pages) on how controlling diabetes is about lowering blood sugar and cholesterol levels, the Danish drugmaker is out with major data on its glucose fighting drug Liraglutide (Yeah, I know it's a mouthful, but they haven't announced its commercial name yet).

The company revealed results of two large, late-stage clinical trials showing a majority of patients on the injectable drug got their blood sugar levels below goal and many people lost between 4.4 and 8.8 pounds. Weight gain is a common side effect of many diabetes drugs, so anytime a treatment for the disease carries weight loss, it's considered a bonus.

David Kliff who writes a newsletter called "The Diabetic Investor" says in a note to subscribers today, "As encouraging as these results are the issue for Novo is timing. With Liraglutide expected to be submitted to the Food and Drug Administration (FDA), in mid-2008 if approved the drug would not hit the market until 2009, about one year before the long-acting once a week version of Byetta is expected to be on the market. Given the option of waiting for Byetta LAR or using once-daily Liraglutide Diabetic Investor suspects the majority of physicians will wait for LAR."

LAR stands for long-acting release. Byetta is the twice-a-day injectable drug from Amylin Pharmaceuticals and Eli Lilly . Those two companies along with Alkermes , are working on Byetta LAR. The major data on that drug is expected sometime in the fourth quarter of this year. Investor anticipation of those results is behind AMLN's recent run-up. Kliff is a longtime bull on AMLN and Byetta.

Meantime, Novo says it expects to be able to announce the results of two more big studies on Liraglutide later this year or early next. And the company hopes to publish details of the entire clinical program in a peer-reviewed medical journal and/or at scientific conferences.

Publications and presentations like that give data street cred in the medical and investment communities.

Questions? Comments? Pharma@cnbc.com

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