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Shares in Novo Nordisk fell sharply on Friday as disappointing results from trials of its latest obesity drug slashed the market capitalization of its largest company by about 90 billion euros. Europe.
CagriSema helped patients lose an average of 22.7% of their body weight in a late-stage trial, Novo Nordisk said Friday, only slightly beating the results of Mounjaro, a rival treatment from Eli Lilly.
Novo Nordisk has set an average weight loss target of 25% thanks to its new drug.
Martin Holst Lange, the company’s executive vice president of development, said only 57% of patients received the highest dose of the drug. “We are encouraged by CagriSema’s weight loss record,” he said.
The drugmaker’s shares fell as much as 27% in mid-morning trading in Denmark before partially recovering to trade 20% lower.
Barclays analyst Emily Field said the market was having an “emotional reaction” to Novo Nordisk failing to meet the 25% weight loss target it had set.
“In some ways, there could be a reputational issue with management not meeting this standard,” she said.
Field added that the company told her it was disappointed and was trying to figure out why so many patients had not taken the highest dose of the drug. It could be because of side effects or simply because they’re happy with the weight they’ve lost, she said.
Novo Nordisk is planning a new trial in the first half of 2025 to explore how to increase the dose and induce additional weight loss.
Novo Nordisk and Eli Lilly are vying for dominance in a market that has grown sevenfold in just three years to $24 billion by 2023, according to data analytics firm Iqvia.
Weight-loss and diabetes drugs Wegovy and Ozempic have transformed Novo Nordisk’s fortunes, tripling its value in the past five years. Barclays previously modeled peak revenue for CagriSema of $49 billion in 2038, nearly double revenue forecasts for Ozempic and Wegovy in 2025, their peak year.
But before the trial data was released, some investors worried that Novo Nordisk’s high valuation was unsustainable and that the overall obesity drug market might not be as valuable as expected.
Some people question whether the administration of US President-elect Donald Trump will make the weight loss drug market more difficult.
Robert F Kennedy Jr, Trump’s nominee for Health Secretary, has criticized the use of drugs instead of dietary changes to control obesity.
Novo Nordisk was hoping its “next generation” weight loss drug could lead the sector, after its shares struggled to keep up with Eli Lilly and suffered a setback due to disappointing results for an experimental weight loss drug in September.
“CagriSema is really important for us,” chief executive Lars Fruergaard Jørgensen told the Financial Times in November. “It is a next-generation product and has the potential to be best in class. ”
Patients taking Mounjaro, also known as Zepbound in the US, lost an average of 22.5% of their weight in phase 3 trials when applied as part of an improved diet and exercise regimen. . Products on Wegovy, also made by Novo Nordisk, lost an average of about 15% under similar conditions.
About 40% of patients in the CagriSema trial lost 25% of their weight in 68 weeks.
CagriSema combines semaglutide, the active ingredient in Wegovy and Ozempic, with cagrilintide, another hormone that makes people feel full longer.
The trial of 3,417 people who received weekly injections found that the most common side effects were gastrointestinal, the majority of which were mild to moderate and decreased over time.
Novo Nordisk is expected to apply for approval of the drug late next year.
Shares of rivals rose again, with Eli Lilly up as much as 10% in premarket trading and biotechs with potential obesity drugs in the pipeline, such as Viking Therapeutics, also increase.
Additional reporting by George Steer in London
