Novo Nordisk shares plunge 20% after disappointing trial results; Lilly

Shares of Danish pharmaceutical giant Novo Nordisk plummeted more than 24% at one point on Friday after reporting results in a late-stage trial for its experimental CagriSema weight loss drug that missed expectations.

The maker of the wildly popular Wegovy obesity drug said its new drug candidate helped patients reduce their weight by 22.7%, below the 25% it told CNBC it had previously forecast.

The stock had pared some losses to trade down around 20% at 1:57 p.m. London time. Shares of rival obesity drug maker Eli Lilly jumped 10% in pre-market trade but came off highs to trade around 5% higher.

The trial results deal a blow to expectations that CagriSema could become a next-generation obesity drug. The two-drug injectable treatment combines semaglutide, the active ingredient in Wegovy, along with amylin analog Cagrilintide, a nascent form of weight loss treatment.

In comments to CNBC, however, Novo said that CagriSema had outperformed Wegovy in weight reduction and that its performance was “on par with best-in-class treatments.”

“We are encouraged by the weight loss profile of CagriSema demonstrating superiority over both semaglutide and cagrilintide in monotherapy in the REDEFINE 1 trial. This was achieved even though only 57% of patients reached the highest CagriSema dose,” Martin Holst Lange, executive vice president for Development at Novo Nordisk, said in a separate press release.

“With the insights obtained from the REDEFINE 1 trial, we plan to further explore the additional weight loss potential of CagriSema,” he added.

The phase three trial was based on around 3,400 people with obesity, or who were overweight with one or more comorbidities, and took place over 68 weeks. It followed a flexible protocol, meaning patients could modify their dosage throughout the trial. By the end, just 57.3% of patients treated with CagriSema were on the highest dose.

Novo said that topline and full results will be presented next year and that it expects regulatory submission of the drug by the end of 2025. Results from a second phase 3 trial, REDEFINE 2, based on adults with type 2 diabetes who are either obese or overweight, are also expected during the first half of next year.

Soren Lontoft, pharma equity analyst at Sydbank, told CNBC that the share reaction on Friday was warranted for those who see the future of the market defined solely by total weight reduction. However, he pointed to growing segmentation within the market — including among those who cannot tolerate traditional GLP-1s and those who prefer lesser weight loss — with some people more drawn to alternative options.

“If you think the obesity market will be defined by a portfolio of medications going forward to address different needs then you shouldn’t be downbeat about these data,” he said over the phone.

In a note Friday, J.P. Morgan acknowledged that while the…