Novo Nordisk's weight loss drug Wegovy receives approval from the European Union, reducing the risk of major heart disease by 20%

According to an announcement by Novo Nordisk, the European Medicines Agency (EMA) supports the company's use of the weight-loss drug Wegovy to reduce the risk of stroke and heart disease. Analysts believe that this significantly expands the potential number of beneficiaries.

The EMA's drug advisory group announced on Thursday that this decision was based on a large study supported by Novo Nordisk. The study showed that Wegovy can reduce the risk of major heart diseases by 20%. Globally, heart disease remains the leading cause of death.

Earlier this week, the UK also approved an expanded use of Wegovy. The U.S. Food and Drug Administration (FDA) expanded the drug's label in March this year to allow for the reduction of the risk of heart disease and stroke. This helps change Wegovy's image from being solely a cosmetic treatment drug to being seen as a drug with multiple health benefits.

In the U.S., the new approval for Wegovy has prompted Medicare to cover its costs as a treatment for heart disease, providing reimbursement pathways for millions of elderly and long-term disabled individuals, even though it still cannot be reimbursed under Medicare as a weight-loss drug alone.

Novo Nordisk has been working to meet the demand for Wegovy and another drug, Ozempic. Ozempic is a diabetes treatment drug that is widely popular due to its significant weight-loss effects. Currently, most of Wegovy's supply has flowed into the U.S. market, demonstrating strong demand globally.

On Thursday, Novo Nordisk's U.S. stock fell nearly 4% in early trading, before halving its losses.