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Novo Nordisk’s shares fell sharply on Friday as disappointing results from tests of its latest obesity drug wiped about €90bn off the valuation of Europe’s largest company by market capitalisation.
CagriSema helped patients lose an average of 22.7 per cent 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 of 25 per cent weight loss from its new drug.
Martin Holst Lange, the company’s executive vice-president for development, said that only 57 per cent of patients had received the highest dose of the drug. “We are encouraged by the weight-loss profile of CagriSema,” he said.
The drugmaker’s shares were down as much as 27 per cent in mid-morning trading in Denmark before mounting a partial recovery to trade 20 per cent lower.
Barclays analyst Emily Field said the market was having an “emotional reaction” to Novo Nordisk not hitting the 25 per cent weight loss bar that it had set.
“There may be a management credibility issue, in a way, of not meeting this bar,” she said.
Field added that the company had told her it was disappointed and was trying to work out why so many patients had not taken the highest dose of the drug. It could be because of side-effects or simply that they were content with the amount of weight that they were losing, she said.
Novo Nordisk is planning a new trial in the first half of 2025 to explore how to increase the doses and create the potential for additional weight loss.
Novo Nordisk and Eli Lilly are competing for dominance in a market that grew sevenfold in just three years to $24bn in 2023, according to data analytics firm Iqvia.
The weight loss and diabetes drugs Wegovy and Ozempic have transformed the fortunes of Novo Nordisk, leading it more than triple in value in the past five years. Barclays had previously modelled $49bn 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 published, some investors worried that Novo Nordisk’s valuation was unsustainably high and that the wider obesity drugs market might not be as valuable as expected.
Some have questioned whether US president-elect Donald Trump’s administration will make the market tougher for weight loss drugs.
Robert F Kennedy Jr, Trump’s nominee for health secretary, has been critical of using drugs, rather than changing diet, to control obesity.
Novo Nordisk had hoped its “next generation” weight-loss drug could lead the field, after its shares had struggled to keep pace with Eli Lilly and it suffered a setback from disappointing results for an experimental weight-loss pill in September.
“CagriSema is really important for us,” chief executive Lars Fruergaard Jørgensen told the Financial Times in November. “It’s a next-generation product and it has the potential to be best in class.”
Patients receiving Mounjaro, also called Zepbound in the US, lost an average of 22.5 per cent of their weight in phase 3 trials when taken as part of a regime of improved diet and exercise. Those on Wegovy, also made by Novo Nordisk, lost an average of about 15 per cent in similar conditions.
About 40 per cent of patients in the CagriSema trial achieved 25 per cent 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 for longer.
The trial of 3,417 people taking a weekly injection found that the most common side effects were gastrointestinal, the vast majority of which were mild and moderate and diminished over time.
Novo Nordisk expects to file for regulatory approval for the drug towards the end of next year.
Shares in rivals bounced, with Eli Lilly up as much as 10 per cent in pre-market trading, and biotechs with potential obesity drugs in the pipeline, such as Viking Therapeutics, also rising.
Additional reporting by George Steer in London
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