Novo Nordisk shares fall on disappointing weight-loss drug trial data

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Shares in Novo Nordisk fell sharply on Friday as disappointing trial results for its latest anti-obesity drug wiped around €90 billion off the valuation of Europe’s largest company by market capitalization.

CagriSema helped patients lose an average of 22.7 percent of their body weight in a late-stage trial, Novo Nordisk said on Friday, only marginally beating the results of Mounjaro, a rival treatment from Eli Lilly.

Novo Nordisk had targeted an average weight loss of 25 percent with its new drug.

Martin Holst Lange, the company’s executive vice president of development, said only 57 percent of patients had received the highest dose of the drug. “We are encouraged by CagriSema’s weight loss profile,” he said.

The drugmaker’s shares fell as much as 27 percent in mid-morning trading in Denmark before mounting a partial recovery to trade 20 percent lower.

Barclays analyst Emily Field said the market was having an “emotional reaction” when Novo Nordisk missed the 25 per cent weight loss limit it had set.

“There may be a management credibility issue, in some ways, in not meeting this requirement,” he said.

Field added that the company had told him it was disappointed and was trying to figure out why so many patients had not taken the higher dose of the drug. It could be because of side effects or simply because they were happy with the amount of weight they were losing, he said.

Novo Nordisk is planning a new trial in the first half of 2025 to explore how to increase doses and create the possibility of additional weight loss.

Novo Nordisk and Eli Lilly are competing for dominance in a market that has grown sevenfold in just three years to reach $24 billion in 2023, according to data analytics firm Iqvia.

Weight loss and diabetes drugs Wegovy and Ozempic have transformed the fortunes of Novo Nordisk, tripling its value in the past five years. Barclays had previously estimated $49 billion in peak sales for CagriSema in 2038, almost double its sales forecast for Ozempic and Wegovy in 2025, their peak year.

But before the trial data was released, some investors were concerned that Novo Nordisk’s valuation was unsustainably high and that the broader obesity drug market might not be as valuable as expected.

Some have questioned whether US President-elect Donald Trump’s administration will tighten the market for weight-loss drugs.

Robert F Kennedy Jr, Trump’s nominee for health secretary, has criticized the use of medications, rather than diet changes, to control obesity.

Novo Nordisk had hoped its “next-generation” weight-loss drug could lead the field, after its stock had struggled to keep pace with Eli Lilly and it suffered a setback from disappointing results from an experimental weight-loss pill. weight in September.

“CagriSema is really important to us,” CEO Lars Fruergaard Jørgensen told the Financial Times in November. “It is a next-generation product and has the potential to be the best in its class.”

Patients receiving Mounjaro, also called Zepbound in the United States, lost an average of 22.5 percent of their weight in Phase 3 trials when they took it as part of an improved diet and exercise regimen. Those from Wegovy, also made by Novo Nordisk, lost an average of about 15 percent under similar conditions.

About 40 percent of patients in the CagriSema trial achieved a 25 percent weight loss over the 68 weeks.

CagriSema combines semaglutide, the active ingredient in Wegovy and Ozempic, with cagrilintide, another hormone that makes people feel fuller longer.

The trial of 3,417 people who received a weekly injection found that the most common side effects were gastrointestinal, the vast majority of which were mild and moderate and decreased over time.

Novo Nordisk expects to apply for regulatory approval for the drug late next year.

Shares of rivals rebounded, with Eli Lilly rising as much as 10 percent in premarket trading, and biotech companies with potential anti-obesity drugs in the pipeline, such as Viking Therapeutics, also rose.

Additional reporting by George Steer in London