Medical device stocks rise in relief after Wegovy heart benefits data (updated)

Inari Medical

13/11/2023 15:56

(Adds fresh analyst comments in paragraphs 3, 10; updates share
movement)
       Nov 13 (Reuters) - Shares of U.S. medical device makers
rose on Monday as a potential hit from the cardiac benefits of
Novo Nordisk's  NOVOb.CO  weight-loss drug Wegovy was seen as
more moderate for the battered sector than initially feared by
investors.
    To be sure, the full results presented on Saturday at a
major medical meeting gave analysts even more confidence in the
heart protective benefits of the hugely popular drug.
    "We believe key findings could be seen as a marginal
positive for some, but not all, verticals within MedTech,
especially given currently depressed sentiment," said Baird
analyst Jeff Johnson. 
    The data, for instance, showed the reduction in risk of
non-fatal stroke was not statistically significant over the
length of the trial. 
    That lifted shares of Penumbra  PEN.N , which makes devices
used in surgeries for stroke patients, 13% in morning trading.
    Its shares have tumbled about 28% as of last close since
Novo in August said Wegovy had also shown a clear cardiovascular
benefit.
    The $4.64 billion iShares US Medical Devices ETF  IHI.P 
rose 2.3% on Monday, eyeing its biggest one-day percentage gain
since April. The ETF is down about 13% this year, through
Friday's close.
    Shares of diabetes care device makers Abbott Laboratories
 ABT.N , Dexcom  DXCM.O , Insulet  PODD.O , Tandem  TNDM.O  and
Medtronic  MDT.N  gained between 2% and 8%. 
    Monday's moves are the latest sign that investors across
industries are closely looking at developments with the popular
new class of weight-loss and diabetes drugs called GLP-1s such
as Wegovy and Eli Lilly's  LLY.N  Mounjaro and Zepbound. 
    "The full detailed results ... do not shift our outlook that
MedTech device stocks appear broadly oversold," said Leerink
analyst Mike Kratky. 


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ANALYSIS-Healthcare companies counter investor worries over
Wegovy effect      urn:newsml:reuters.com:*:nL1N3BW32G
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 (Reporting by Leroy Leo and Medha Singh in Bengaluru; Editing
by Sriraj Kalluvila)
 ((Leroy.Dsouza@thomsonreuters.com ; https://twitter.com/LeroyLeo7;))