Why Shares in Novo Nordisk Bumped Higher Today

Key Points

• Novo Nordisk has a significant presence in the U.S. manufacturing sector and is expanding its facility.

• The administration won't impose tariffs until negotiations are closed.

• The drugmaker is awaiting approval to market an oral medication for weight loss.

• 10 stocks we like better than Novo Nordisk ›

Shares in Novo Nordisk (NYSE: NVO) were up 6% by 11:30 a.m. on Wednesday. The move comes after Pfizer's agreement with the Trump administration raised hopes that other pharmaceutical companies, including Novo Nordisk, could reach similar terms.

Trump's pharmaceutical tariffs

The administration aims to bring pharmaceutical manufacturing back to the U.S. President Donald Trump's threat of 100% tariffs "on any branded or patented Pharmaceutical Product," which he made in a Truth Social post, is targeted at pharmaceutical companies, domestic or otherwise, that manufacture drugs abroad and import them for sale in the U.S.

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However, Pfizer said that today's agreement grants the company a three-year grace period before the tariffs are applied, on the condition that it invests more in manufacturing in the U.S. The company said that it voluntarily "agreed to implement measures designed to ensure Americans receive comparable drug prices to those available in other developed countries."

What it means to Novo Nordisk investors

Although Novo Nordisk is a European company, it has a substantial manufacturing presence in North Carolina and is making a $4.1 billion investment to expand its manufacturing in the state. Furthermore, Commerce Secretary Howard Lutnick has stated that the administration will not impose the tariffs until negotiations with pharmaceutical companies are completed.

Image source: Getty Images.

The news raises hopes that Novo Nordisk could reach a similar deal, and it comes at a time when the company is hoping to receive approval to market an oral weight loss drug -- one great reason to buy the stock in 2025.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.