July 12 (Reuters) - Novo Nordisk's popular

diabetes treatment Ozempic could be tied to a lower risk of

cognitive problems, according to an observational study

published by researchers at Oxford University.

The study, published in the Lancet's eClinicalMedicine

journal on Thursday, explored more than 100 million medical

records of U.S. patients to see if Ozempic increased the risk of

several neurological and psychiatric conditions in the first

year of use compared with three common antidiabetic drugs.

The study found Ozempic, or semaglutide, was not tied to a

higher risk of any of the neurological or psychiatric conditions

studied, such as anxiety or depression, and patients taking

Ozempic had lower rates of cognitive decline and nicotine use.

WHY IT'S IMPORTANT

The study helps further lay to rest concerns that treatment

with semaglutide - originally designed for type 2 diabetes but

now also approved for weight loss under the brand Wegovy -

increases the risk of suicidal thoughts.

The findings also suggest that treatment with semaglutide

and similar drugs may be associated with a lower risk of

dementia and can help reduce nicotine cravings.

The findings need to be confirmed in more rigorous

randomized controlled trials. The authors also cautioned that

the findings cannot be applied to people without diabetes.

MARKET REACTION

U.S.-listed shares of Novo Nordisk rose 1.8%, while shares

of rival Eli Lilly ( LLY ) rose 1.6%.

KEY QUOTES

Howard Fillit, chief science officer of the Alzheimer's Drug

Discovery Foundation, said the study is the latest in a series

suggesting drugs in this class may have a cognitive benefit.

Fillit added that observational studies such as this are

suggestive only. "The answer to all those limitations is to do a

randomized clinical trial, which is exactly what Novo is doing."

WHAT'S NEXT

The Danish drugmaker in 2021 began testing semaglutide in

patients with early Alzheimer's disease, with results expected

by 2025.