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Shares of Novo Nordisk A/S (NYSE: NVO) are up 17% this morning after the pharmaceutical behemoth reported results of its “SELECT” trial.

Wegovy lowers the risk of cardiovascular events

On Tuesday, the multinational cited data from that late-stage trial and said Wegovy – its weight-loss drug reduces the risk of heart attacks or strokes in adult patients of a cardiovascular disease by 20%.

The aforementioned study saw participation from more than 17,600 adults and spanned over five years. On CNBC’s “Squawk Box”, Mizuho strategist Jared Holz said today:

It’s going to open up the market to a bigger patient population over time … This data is going to bring these drugs to the forefront over the next couple of years from an investment standpoint.

The stock market news arrives only two days before Novo Nordisk is scheduled to report its second-quarter financial results.

Are insurance plans now going to cover Wegovy?

What’s also important is that the obesity drug was expected to be effective in trimming the risk of cardiovascular events by 15% to 17%.

The fact that it came in well ahead of expectations at 20% will likely help with reimbursement, as per Mizuho’s Holz.

Insurance companies will have to find a way to carve these drugs into their plans at an affordable price … So, near-term and long-term obesity category is one we’ll continue to watch.

The Danish company now plans on filing with the U.S. and European regulators for a label indication expansion in the coming months, as per the press release. Year-to-date, Novo Nordisk shares are now up roughly 40%.

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