Shares of Danish pharmaceutical giant Novo Nordisk rebounded after U.S. regulators signaled plans to crack down on illegal copycat versions of approved medicines.
The company’s stock rose nearly 5% in early trading, recovering some losses from previous sessions after the U.S. Food and Drug Administration (FDA) said it would act against companies mass-marketing unapproved drug alternatives, News.Az reports, citing Reuters.
The FDA said it would take action against companies promoting unapproved drugs as substitutes for approved treatments, warning that such products may not meet safety, quality or effectiveness standards.
The announcement came shortly after concerns emerged over cheaper compounded versions of popular weight-loss medicines entering the market.
Novo Nordisk shares had fallen sharply earlier after a telehealth company introduced a significantly cheaper compounded version of its weight-loss treatment, intensifying price competition.
The Danish drugmaker had already warned of growing price pressure on its weight-loss portfolio and recently lowered its full-year outlook, contributing to a sharp drop in its share price earlier this week.
Despite the rebound, Novo Nordisk shares remain near their lowest levels since the launch of its blockbuster weight-loss treatment in 2021.
The company’s performance continues to be closely watched by investors as competition intensifies in the fast-growing weight-loss drug market.