PresentationOperator Day, and thank you for standing by. Welcome to the Novo Nordisk to acquire at Akero Therapeutics, Inc. Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jacob Rode, Head of Investor Relations. Please go ahead. ...

Group 1 - Novo Nordisk announced the acquisition of Akero Therapeutics for up to $5.2 billion to enhance its portfolio with a promising experimental liver disease drug [1] - This acquisition marks the first major deal for the Danish drugmaker in its strategic expansion efforts [1] - The deal reflects Novo Nordisk's commitment to addressing liver diseases, which are becoming increasingly prevalent [1] Group 2 - Akero Therapeutics is based in the U.S. and is known for its innovative approaches to treating liver conditions [1] - The acquisition is expected to bolster Novo Nordisk's research and development capabilities in the liver disease segment [1] - This move aligns with industry trends focusing on specialized treatments for chronic diseases [1]

Core Insights - Novo Nordisk has agreed to acquire Akero Therapeutics for up to $5.2 billion in cash, leading to a 1% decline in Novo Nordisk's stock price to $59, while Akero's stock rose by 16.8% to $54.29 following the announcement [1] - Year-to-date, Novo Nordisk's stock has decreased by 31%, struggling to recover from a significant drop of nearly 22% after its earnings report in late July, while Akero has outperformed with a 95% increase year-to-date [2] - The options market shows a bullish sentiment for Novo Nordisk, with a high put/call volume ratio indicating potential headwinds if this sentiment unwinds [3] - Both companies exhibit low volatility expectations in the options market, with Schaeffer's Volatility Index indicating relatively low pricing for options [4] Company Performance - Novo Nordisk's stock is currently facing pressure, trading at $59, down 31% year-to-date, and has not recovered from a significant post-earnings drop [2] - Akero Therapeutics has seen a strong performance, with a 95% increase year-to-date and a notable rise in stock price following the acquisition announcement [2] Market Sentiment - The options market for Novo Nordisk has been notably bullish, with a put/call volume ratio of 3.96, placing it in the 90th percentile of annual readings, suggesting potential for increased volatility if sentiment shifts [3] - The Schaeffer's Volatility Index for both Novo Nordisk and Akero indicates low volatility expectations, with values of 54% and 61%, respectively, suggesting a calm market outlook for options trading [4]

Core Viewpoint - Novo Nordisk A/S has agreed to acquire Akero Therapeutics, Inc. for a total value of approximately $4.7 billion, focusing on treatments for metabolic diseases [1][2]. Transaction Terms - Novo Nordisk will pay $54 per share in cash, totaling $4.7 billion at closing [2]. - Akero shareholders will also receive a non-transferable contingent value right (CVR) for a potential additional payment of $6 per share, amounting to $0.5 billion, contingent upon U.S. regulatory approval of EFX for treating compensated cirrhosis due to MASH [2]. Strategic and Portfolio Fit - The acquisition aligns with Novo Nordisk's long-term strategy to develop innovative medicines for diabetes, obesity, and related comorbidities [3]. - Akero's EFX is a promising treatment for metabolic dysfunction-associated steatohepatitis (MASH) [3]. Clinical Development - EFX is currently being evaluated in the phase 3 SYNCHRONY program, which includes three clinical trials aimed at supporting regulatory approval for treating pre-cirrhotic (F2-F3) MASH and compensated cirrhosis (F4) due to MASH [4]. - Previous phase 2b trials showed significant improvements in liver fibrosis, with reductions of 49% and 29% in fibrosis for the HARMONY and SYMMETRY trials, respectively, compared to placebo groups [5]. Financial Implications - The acquisition is not expected to affect Novo Nordisk's operating profit outlook for 2025, although it will negatively impact free cash flow by approximately $4 billion [6]. - For 2026, increased research and development costs are anticipated, leading to a projected three percentage point decrease in full-year operating profit growth [7]. - The transaction will primarily be financed through debt [7].

Summary of Novo Nordisk's Acquisition of Akero Therapeutics Conference Call Company and Industry - **Company**: Novo Nordisk (NYSE: NVO) - **Acquisition Target**: Akero Therapeutics, Inc. - **Industry**: Pharmaceutical, specifically focusing on diabetes, obesity, and metabolic diseases such as MASH (Metabolic Associated Steatotic Liver Disease) Core Points and Arguments 1. **Acquisition Announcement**: Novo Nordisk announced the acquisition of Akero Therapeutics, marking the largest R&D-related acquisition in its history, aimed at enhancing its portfolio in diabetes and obesity treatments [4][2][5] 2. **Strategic Fit**: The acquisition is strategically aligned with Novo Nordisk's focus on diabetes, obesity, and related comorbidities, particularly through Akero's late-stage asset, efruxifermin (EFX), which targets MASH [4][5][10] 3. **Market Need**: Over 250 million people globally are affected by MASH, indicating a significant unmet medical need and commercial opportunity for innovative treatments [5][6] 4. **Efruxifermin's Potential**: Efruxifermin is positioned as a leading treatment option for MASH, with promising Phase II data showing efficacy in fibrosis regression, particularly in late-stage F4 patients [8][10][11] 5. **Clinical Trial Results**: In the HARMONY Phase II trial, 49% of F2-F3 patients achieved fibrosis improvement, while 29% of F4 patients showed similar results in the SYMMETRY Phase IIb trial [11][12] 6. **Future Development Plans**: The ongoing SYNCHRONY Phase III program will further evaluate efruxifermin across all MASH stages, with initial results expected next year [12][11] 7. **Integration with Existing Portfolio**: Efruxifermin complements Novo Nordisk's existing GLP-1 portfolio, with potential for combination therapies to enhance treatment efficacy [26][27] 8. **Financial Impact**: The acquisition is expected to have a low single-digit dilutive impact on earnings, with a projected 3% impact on operating profit for the following year due to increased R&D costs [56][58] Additional Important Points 1. **Regulatory Considerations**: The FDA's requirements for accelerated approval in MASH will be critical for the success of efruxifermin, particularly in the F2 and F3 stages [50][48] 2. **Competitive Landscape**: The acquisition positions Novo Nordisk favorably against competitors in the FGF21 space, with expectations of superior efficacy and safety profiles for efruxifermin compared to other assets [20][41] 3. **CEO's Vision**: The acquisition aligns with the new CEO's strategy to enhance Novo Nordisk's leadership in diabetes and obesity treatments, emphasizing innovation and patient impact [14][62] This summary encapsulates the key points discussed during the conference call regarding Novo Nordisk's acquisition of Akero Therapeutics, highlighting the strategic importance, market potential, and future plans associated with this significant move in the pharmaceutical industry.

Novo Nordisk said on Thursday it would acquire Akero Therapeutics for up to $5.2 billion in cash, marking a significant push into treatments for fatty liver disease as the Danish drugmaker seeks to br... ...

Core Viewpoint - Novo Nordisk has reached a final agreement to acquire Akero Therapeutics for up to $5.2 billion, with a cash offer of $54 per share and an additional contingent value right of $6 per share, pending regulatory approval of Akero's drug efruxifermin [1][2] Group 1: Acquisition Details - The total acquisition price is up to $5.2 billion, consisting of $4.7 billion in cash and a $500 million contingent value right [1] - The deal has been unanimously approved by Akero's board and is expected to close by the end of the year [1] - Following the announcement, Akero's stock surged nearly 18%, while Novo Nordisk's stock fell over 1% [1] Group 2: Akero Therapeutics and Efruxifermin - Akero is a clinical-stage biopharmaceutical company focused on developing therapies for patients with severe metabolic diseases [1] - Efruxifermin is currently undergoing late-stage trials aimed at treating patients with moderate to advanced liver fibrosis due to metabolic dysfunction-associated steatohepatitis (MASH) [1] - MASH can progress from metabolic dysfunction-associated steatotic liver disease (MASLD) and is characterized by steatosis, inflammation, and fibrosis, potentially leading to cirrhosis [1] Group 3: Strategic Implications - Novo Nordisk's CEO emphasized the potential of efruxifermin to reverse liver damage and become a cornerstone therapy, either alone or in combination with Wegovy [2] - Akero believes that Novo Nordisk's global leadership in metabolic diseases will accelerate the evaluation and commercialization of efruxifermin [2] - A contingent payment of $6 per share will be made to Akero shareholders if efruxifermin receives full approval from U.S. regulators by June 30, 2031 [2]

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Core Viewpoint - Novo Nordisk has agreed to acquire Akero Therapeutics for up to $5.2 billion to enhance its position in the treatment of metabolic diseases related to obesity, particularly focusing on a promising liver disease drug [1][4]. Group 1: Acquisition Details - The acquisition involves a cash payment of $54 per share, representing a 16% premium over Akero's closing price of $46.49 [1]. - An additional contingent value right (CVR) of $6 per share will be paid if the drug receives full approval in the U.S. by June 30, 2031 [1]. - Following the announcement, Akero's stock surged over 19% in pre-market trading, while Novo Nordisk's stock fell nearly 2% [1]. Group 2: Strategic Importance - The key asset in this acquisition is Akero's experimental drug efruxifermin, currently in late-stage trials for treating severe liver scarring due to metabolic dysfunction-associated steatotic liver disease (MASH) [4]. - Novo Nordisk believes efruxifermin has the potential to be the first therapy to reverse end-stage liver damage associated with MASH, aligning strategically with its existing product line [4]. - The acquisition reflects the growing importance of the MASH field and the competitive landscape of obesity drug markets, with other pharmaceutical giants also making significant acquisitions in this area [4]. Group 3: Leadership and Strategic Direction - This acquisition marks the first major deal under the new CEO Mike Doustdar, who took office in July and aims to boost sales growth amid competitive pressures from rivals like Eli Lilly [1][6]. - Doustdar has indicated a focus on developing next-generation obesity and diabetes drugs that can also treat MASH and related cardiovascular metabolic diseases, aligning with the strategic direction of this acquisition [6].

Acquisition Overview - Novo Nordisk is set to acquire Akero Therapeutics Inc to enhance its portfolio in diabetes, obesity, and related comorbidities [2, 10] - The acquisition includes Akero's lead asset, Efruxifermin (EFX), for $47 billion USD at closing, plus a contingent value right (CVR) of $05 billion USD [14] - This acquisition aligns with Novo Nordisk's strategy to develop innovative medicines for people living with diabetes, obesity, and associated comorbidities [10, 14] Efruxifermin (EFX) Potential - Efruxifermin is highlighted as a potential first- and best-in-class asset in MASH (metabolic dysfunction-associated steatohepatitis) [14] - EFX is the only asset with demonstrated efficacy for F4 (cirrhosis) in MASH [26] - Phase 2 HARMONY trial results in F2-F3 patients showed 49% improvement in fibrosis with no worsening of MASH, and 37% MASH resolution with no worsening of fibrosis [18] - Phase 2 SYMMETRY trial results in F4 patients showed 29% improvement in fibrosis with no worsening of MASH, and 42% MASH resolution with no worsening of fibrosis [18] MASH Market and Unmet Needs - There is a significant unmet need across MASH stages, particularly for patients living with cirrhosis (F4) [15, 26] - Semaglutide 24 mg (Wegovy) is approved in the US for patients with moderate to advanced liver fibrosis (F2-F3) but not with cirrhosis (F4), creating an opportunity for EFX [17] - MASH affects over 250 million people globally, with prevalence growing [17] Clinical Development - A Phase 3 clinical development program (SYNCHRONY) is ongoing to deliver on the potential of efruxifermin [22, 24] - The SYNCHRONY program includes trials for F1-F4 stages, focusing on safety & tolerability, fibrosis improvement, and disease progression [23]