Novo Nordisk ails after drug ruling

Strong response from markets follows failure

News that Novo Nordisk, the Danish drugs company, failed to win approval for a new drug triggered a strong response from markets.

The US Food and Drug Administration rejected the company’s Tresiba insulin product, signalling a roadblock for what was expected to rival Sanofi’s best-selling insulin product Lantus.

The shares dropped 13.2 per cent to DKr928.50 on the news. “Major delay to Tresiba: significant downgrades in prospect,” Tim Race, analyst at Deutsche Bank, wrote in a note to clients.

Investors in Lundin Petroleum took fright after the Swedish company said one of its offshore oilfields may contain less than originally forecast.

The group previously said its Sverdrup field had as much as 3.3bn barrels of oil. Ashley Heppenstall, chief executive, on Monday said the latest drilling revealed a revised range of between 800m and 1.8bn barrels.

The shares slid 10.3 per cent to SKr147.90.

Saipem lost ground after the chief executive of Eni, which has a large stake, said Eni could consider selling its 43 per cent holding in the Italian oil services group.

The shares slipped 2 per cent to €21.04 in late afternoon trading.

The wider pan-European FTSE Eurofirst 300 fell 0.7 per cent to 1,154.31.

Investors cheered news that Ahold, the Dutch retail group, sold its 60 per cent stake in ICA, a Scandinavian join venture with Hakon Invest, for €2.5bn in cash.

The deal is conditional on approval but is expected to be completed by the middle of this year. Shares in Ahold rose 3.8 per cent to €11.00 on the news.

Merck, the German pharmaceutical group, received a fillip after analysts at Deutsche Bank raised their target on the shares from €113 per share to €118 with a “buy” rating.

“With strong financial performance in 2012 and substantial cost-cutting traction, we see Merck as well positioned to raise its 2014 targets in the first half of this year,” the bank’s analysts wrote.

The shares rose 2.1 per cent to €99.10.

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