A positive note from an analyst and a new supply deal were good enough to power Novo Nordisk (NVO 1.29%) stock ahead on Wednesday, despite some negative news about its manufacturing efforts. Shares of the Wegovy maker closed slightly over 1% higher, eclipsing the 0.9% drop of the S&P 500 index on the day.
The supply arrangement was agreed between Novo Nordisk and healthcare tech company Ypsomed. According to a press release published by the latter company, it will supply autoinjectors under a long-term deal that will see Novo Nordisk contribute to an expansion of its partner’s production facilities. The financial terms of the arrangement have not been revealed.
Although Ypsomed did not specifically mention Wegovy or its close relative Ozempic, it’s a near certainty that the these will be the drugs filling the autoinjectors. Wegovy in particular is an extremely popular drug among weight-loss patients, and demand continues to be strong.
Another bullish development for Novo Nordisk is that analyst note. Well before market open, JPMorgan Chase‘s Richard Vosser reiterated his overweight — buy, in other words — recommendation on the company’s stock. He also maintained his price target of 750 Danish kroner ($108) per share, which is well above the current share price of $94.73.
Not all was sunshine and roses for Novo Nordisk on Hump Day. Reuters reported that an inspection by the U.S. Food and Drug Administration (FDA) of a company facility in North Carolina found several deficiencies. Citing a report it had obtained through the Freedom of Information Act, the news agency said that these involved the factory’s control systems aimed at preventing microbial contamination.
Although Novo Nordisk did not comment directly on the FDA report, it did refer to a response it offered after similar assertions were made by the regulator earlier this year. That response stated that the North Carolina facility was “running and producing for the market.”
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.