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Denmark’s benchmark Copenhagen OMX 20 Index headed for its worst retreat since 2008 after its largest constituent Novo Nordisk A/S failed to obtain U.S. approval for an insulin medicine.
The OMX Copenhagen 20 index lost 5.7 percent to 525.21 at 10:30 a.m. local time, headed for the worst performance since falling 6.4 percent on Nov. 6, 2008. Novo Nordisk, which accounted for 46 percent of the benchmark as of last week, fell as much as 17 percent.
Today’s drop pushes the benchmark gauge to the 12th rank this year among 24 developed markets tracked by Bloomberg News. The measure has still advanced 5.7 percent so far in 2013.
Novo Nordisk’s gains in the past four years helped the OMX Copenhagen 20 beat European stocks every year since 2008. The 300 percent rally in the drug company’s shares since April 2009 prompted NASDAQ OMX Copenhagen this month to ask media outlets to use an existing version of the index that caps any member weighting at 20 percent.
Novo Nordisk, the world’s largest insulin maker, failed to win approval for a new insulin as regulators sought a study to assess heart risk, dealing the company a setback in its contest with Sanofi for the diabetes market.
The Food and Drug Administration issued a so-called complete response letter Feb. 8, saying the insulin, Tresiba, can’t be approved without more data on heart safety. Novo Nordisk said it’s unlikely to be able to provide the information next year. The FDA said Novo Nordisk also must resolve a warning letter on one of its plants before Tresiba is approved.
Shares in the Bagsvaerd, Denmark-based company dropped 12 percent to 946 kronor at 10:30 a.m. in Copenhagen.
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