Novo Nordisk, the pharmaceutical giant behind Wegovy and Ozempic, has encountered a significant challenge with its next-generation weight-loss treatment, CagriSema. Clinical trial results released on Monday revealed the drug did not meet expectations, leading to a sharp drop in the company’s stock price. This outcome raises questions about the future of Novo Nordisk’s dominance in the rapidly growing obesity drug market.
Disappointing Trial Results
CagriSema, a weekly injection combining cagrilintide and semaglutide, was designed to outperform Novo Nordisk’s own Wegovy and compete directly with Eli Lilly’s Zepbound (tirzepatide). The aim was to show at least comparable weight loss effectiveness. However, the late-stage study involving 809 participants showed an average weight loss of 23% after 84 weeks, falling short of the 25.5% achieved by tirzepatide.
“This is something of a swing and a miss,” stated Søren Løntoft Hansen, a senior analyst at AL Sydbank.
Novo Nordisk’s shares plunged 16.5% following the announcement, erasing almost 60% of their gains over the past year. In contrast, Eli Lilly’s stock rose 4.3%, indicating a shift in investor confidence toward the rival drugmaker.
The Significance of Amylin and GLP-1
CagriSema’s design aimed to leverage the combined effects of cagrilintide, mimicking amylin (a pancreatic hormone), and semaglutide, the active ingredient in Wegovy and Ozempic (mimicking GLP-1). The idea was to enhance appetite suppression and promote faster feelings of fullness. The fact that it didn’t deliver superior results to tirzepatide is a blow to this approach.
This matters because obesity treatment is becoming increasingly competitive. The market is not just about weight loss; it’s about efficacy, side effects, and convenience. A less effective drug risks losing market share to alternatives, even if it still helps people lose weight.
Novo Nordisk’s Shifting Fortunes
Novo Nordisk has been a market leader in weight-loss and diabetes medications, becoming Europe’s most valuable company in recent years. However, the company has repeatedly lowered its sales and profit projections as Eli Lilly gained ground with tirzepatide. Novo Nordisk was counting on CagriSema to regain momentum.
Analysts at UBS had already reduced their peak sales forecast for Novo Nordisk’s GLP-1 drugs, anticipating disappointing results. The latest data confirms those concerns, with Emmanuel Papadakis at Deutsche Bank bluntly stating that CagriSema “looks somewhat obsolete now.”
Future Prospects
Despite the setback, Novo Nordisk CEO Mike Doustdar defended the drug, calling it “a fantastic drug.” The company still hopes that a higher-dose study will demonstrate better results. They have submitted the medication to US regulators for approval based on earlier trial data and anticipate a decision later this year.
The fate of CagriSema now hinges on additional clinical data and regulatory approval. If successful, it could still carve out a niche in the market. However, the current results signal a shift in competitive dynamics, with Eli Lilly positioning itself as the frontrunner in the next generation of weight-loss drugs.
