Is Aegros a genuine Threat to CSL?, page-51

Fears of an $18 billion mistake

While Australian investors were fast asleep, new details emerged of the seemingly miracle drug weight-loss drug known as Ozempic.

The drug's creator, Novo Nordisk, provided a media release shedding new light on injectable semaglutide last night. What was initially intended to treat diabetes, then morphed into a weight-loss treatment, might soon add chronic kidney disease to its umbrella of uses.

According to the release, Novo Nordisk will stop its once-a-week injection of semaglutide in its kidney outcomes trial. The trial compared injectable semaglutide to a placebo in assessing its effectiveness in preventing the progression of renal impairment in people with type 2 diabetes and chronic kidney disease.

The decision to stop the trial stemmed from a recommendation made by an independent committee as "the results from an interim analysis met certain pre-specified criteria for stopping the trial early for efficacy".

Denmark-based Novo Nordisk enjoyed a 4.9% rally in its stock price amid the announcement. Meanwhile, US-based kidney dialysis provider Davita Inc (NYSE: DVA) cascaded 16.9% as investors mulled the implications of a future with reduced kidney issues.

The pain is undoubtedly extending to CSL shares today due to the company's involvement in the kidney industry after acquiring Vifor in 2022 for approximately A$18 billion.

Vifor, which is now integrated into CSL, houses an array of medications spanning iron deficiency, dialysis, nephrology (the study of kidneys), and rare diseases. In other words, this acquisition is heavily skewed towards the treatment of kidney disease and related illnesses.