Novo Nordisk just landed FDA approval to expand Ozempic’s label for chronic kidney disease, making it the first-ever GLP-1 receptor agonist approved for this use. In the drug world, this is like getting a Michelin star but for pharmaceuticals… It cements Ozempic as a frontrunner in CKD treatment alongside its already dominant presence in diabetes and weight loss (as if it needed another tool in the toolbox).

Given how big of a deal this is, you’d think Novo Nordisk’s stock would be rocketing to the moon. Instead, it’s still down 35% over the past six months, and Jim Cramer is out here sounding the alarm, claiming the company lacks the production capacity to keep up with demand. Which raises the question… is this yet another classic Inverse Cramer moment?

Ozempic has become a revenue machine over the last couple of years, pulling in $13.9 billion in 2023 alone, and while the final figures for 2024 aren’t final yet, it’s reported that Ozempic alone generated nearly $12.87 billion in revenue in just the first 9 months alone. Now, with FDA approval to reduce the risk of kidney failure and cardiovascular disease in CKD patients, its market potential just expanded bigly (as Trump would say).

The opportunity is enormous. CKD affects 37 million Americans, and nearly 40% of diabetes patients will develop the disease, making Ozempic’s new label a substantial opportunity. The FLOW study showed that Ozempic can slow kidney disease progression and reduce the risk of end-stage kidney failure by 24%. It also lowers major cardiovascular events like heart attacks by 18%, cuts cardiovascular-related deaths by 29%, and reduces overall mortality risk by 20%.

You’d think these stats would have investors throwing their wallets at Novo, yet the stock is still reeling from a December meltdown that saw CagriSema (a potential obesity drug) flop in trials, erasing $93 billion in market value in a single day.

Of course, Jim Cramer is out here claiming that Novo simply can’t produce enough Ozempic and Wegovy to meet demand, which, based on his track record, might actually be the strongest buy signal yet. Novo’s production struggles are well known, and analysts aren’t expecting a quick resolution. To make matters worse, the company is staring down price cuts on Wegovy, thanks to new government policies aimed at curbing obesity drug costs.

Despite the struggles, analysts remain excited about the future. Of the 32 covering Novo, 22 rate it a Buy, with price targets pointing to a potential 30%+ upside. More interestingly, Novo is trading at just 22x forward earnings, while its main rival, Eli Lilly, sits at 35x. That’s a 25% discount on a company that’s still one of the most dominant players in the weight-loss and diabetes markets.

And let’s not forget this remains a two-horse race between Novo and Eli Lilly, and in an industry where pricing power reigns supreme, that’s a major advantage. Sure, more competitors will enter the space eventually, but for now, these two companies are running the show.

Novo’s FDA approval for Ozempic in CKD is a massive win, further solidifying its status as the most broadly indicated GLP-1 receptor agonist out there. Demand isn’t the problem. Sales aren’t the problem. The only thing holding this stock back is supply chain bottlenecks. If Novo can sort those out, it’s hard to see why this stock wouldn’t make a comeback.

And if Jim Cramer is bearish? Well, you know the drill… might be time to load up the truck.

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