Novo Nordisk on Friday revealed disappointing leads to a late-stage trial for its experimental next-generation weight problems drug CagriSema, wiping as a lot as $125 billion off its market worth.
The lower-than-expected weight reduction from the drug candidate offers a blow to the Danish firm’s ambitions for a successor to its Wegovy weight-loss drug that’s extra highly effective than Eli Lilly’s rival Zepbound, also called Mounjaro.
Traders and analysts had eagerly awaited this knowledge as a check of Novo’s case that it has a powerful pipeline of medicine to observe Wegovy within the fiercely aggressive anti-obesity market.
The CagriSema trial confirmed the drug helped sufferers minimize their weight by 22.7%, under the 25% Novo Nordisk had anticipated.
Novo’s shares fell as a lot as 27% after the outcomes had been introduced, hitting their lowest since August 2023 in one of many largest one-day wipeouts on file for a European firm. The inventory’s Denamrk-listed shares closed down 21% on Friday.
Shares in US rival Lilly rose 2%.
‘Worst-case scenario’
Novo mentioned if all folks adhered to remedy with CagriSema, sufferers general achieved weight lack of 22.7% after 68 weeks, with 40.4% shedding 25% or extra.
CagriSema is a weekly injection combining semaglutide, which is the lively ingredient in Wegovy and mimics the intestine hormone GLP-1, and a separate molecule known as cagrilintide that mimics the pancreatic hormone amylin.
The 2 hormones mixed suppress starvation and assist management sufferers’ blood glucose.
The outcomes are a “worst-case scenario” for Novo, mentioned Markus Manns, portfolio supervisor at mutual funds agency Union Funding, a Novo and Lilly shareholder.
“CagrisSema is only as good as Zepbound, but more complex to manufacture,” he mentioned.
Lilly’s personal weight problems injection – offered as Zepbound in the USA – led to a mean weight lack of practically 23% in medical trials.
The info from Novo’s CagriSema Section III trial was based mostly on about 3,400 folks with a physique mass index (BMI) of 30 or above or folks with a BMI of 27 and a minimum of one weight-related comorbidity like hypertension or heart problems.
Investor Manns mentioned Novo administration ought to have set extra conservative targets, resembling aiming for better weight reduction than Wegovy or the identical as Zepbound.
“Predicting Phase 3 results is more art than science. However, I think it was a strategic mistake setting expectations so high,” he mentioned.
New trial
Martin Holst Lange, Novo Nordisk’s govt vp for improvement, mentioned Novo was “encouraged” by the information.
He mentioned solely 57% of sufferers within the trial reached the best dose.
Alexander Jenke, a portfolio supervisor at Medical Technique in Munich, and a Novo shareholder, mentioned this could point out that there have been points concerning tolerability amongst some sufferers.
He mentioned there could have been larger charges of gatrointestinal antagonistic occasions resembling nausea, vomiting, and diarrhea.
Nordea analyst Michael Novod mentioned sufferers could have stopped the injections after hitting a passable weight reduction.
Whereas the trial missed expectations, the extreme share value response is overdone, Novod mentioned.
“Despite the disappointing results, CagriSema is still the best weight loss reported in a Phase 3 trial,” he mentioned.
Traders famous that the 2 different affected person teams within the trial which had been both given solely cagrilintide or semaglutide, a lot larger percentages of sufferers reached the best dose: 83% for the cagrilintide arm and 70% for semaglutide.
The corporate didn’t instantly reply to a request for touch upon why extra sufferers didn’t attain the best dose.
Novo mentioned in its assertion the drug had comparable unwanted effects in contrast with its GLP-1 medicine already available on the market.
The most typical antagonistic occasions with CagriSema had been gastrointestinal, and the overwhelming majority had been delicate to average and diminished over time, in keeping with the GLP-1 receptor agonist class, it mentioned.
Novo Nordisk plans to begin a brand new trial within the first half of subsequent yr to additional discover CagriSema’s extra weight-loss potential, a Novo Nordisk spokesperson mentioned.
It expects to submit the drug for regulatory approval in direction of the top of 2025.
Forward of the trial outcomes, analysts estimated peak gross sales for CagriSema could possibly be $20 billion.
Most superior
Novo’s trial is essentially the most superior for an amylin drug candidate presently being examined available in the market.
Shares in Danish drugmaker Zealand Pharma, which is testing a weight-loss drug candidate which additionally mimics the pancreatic hormone amylin, fell after the information.
The success of Wegovy helped make Novo Europe’s largest firm by market capitalization, price greater than $460 billion.
Some analysts forecast the weight problems drug market could possibly be price about $150 billion globally per yr by the early 2030s.
Considerations Novo could also be shedding its first-mover benefit within the weight problems drug race has knocked its shares this yr although.
The stress to discover a extra highly effective successor to Wegovy elevated after Lilly printed knowledge in early December from a late-stage trial that pitted its Zepbound in opposition to Wegovy and confirmed Zepbound was more practical.
