Novo Nordisk A/S (CPH: NOVO-B) is being punished this morning after posting a disappointing update related to CagriSema.
The pharmaceutical behemoth said its experimental weight-loss treatment helped patients lower their weight by 22.7% in a late-stage trial – lower than 25% it had originally expected.
Novo Nordisk stock was down nearly 25% at one point on Friday. Its anti-obesity rival, Eli Lilly & Co, in comparison, jumped as much as 8.0% in premarket.
Others that are positioned to compete with Novo Nordisk in the weight loss market include Amgen, Zealand Pharma, and more recently, Merck & Co Inc.
Why does CagriSema news matter for Novo Nordisk stock
The announcement is significant for Novo Nordisk stock as the management expected CagriSema to emerge as the next-generation treatment for obesity.
CagriSema is a two-drug injectable that combines Cagrilintide and Semaglutide.
Cagrilintide is a novel approach for weight loss but Semaglutide is the active ingredient of the company’s Wegovy as well.
The 68-week phase three trial involving CagriSema saw participation from 3,400 people who were suffering from obesity or were otherwise overweight, as per the press release the European drugmaker published on Friday.
Note that Novo Nordisk is scheduled to share the outcome of a phase three trial that’s testing CagriSema in obese/overweight adults with type 2 diabetes in the coming year as well.
Novo Nordisk stock is now down more than 45% versus its high in late June.
CagriSema outperformed Wegovy in weight loss
On the plus side, the new weight-loss treatment was “on part with best-in-class treatments.”
That’s because CagriSema delivered better results in terms of helping people lower their body weights than Wegovy in the late-stage trial.
“CagriSema demonstrated superiority over both Semaglutide and Cagrilintide in monotherapy in REDEFINE 1 trial. This was achieved even though only 57% of patients reached the highest dose,” Martin Holse Lanage – an executive vice president of Novo Nordisk said in a press release today.
Still, Novo Nordisk stock tanked sharply this morning as investors focused more on the fact that CagriSema failed to meet the company’s original expectations in the phase three trial.
Novo Nordisk is not bailing on CagriSema
Novo Nordisk will continue to “further explore the additional weight-loss potential of CagriSema” and expects to seek regulatory approval for the treatment by the end of 2025.
Shares of the pharmaceutical giant are still slipping at writing perhaps because it wasn’t the first setback for Novo Nordisk this month.
Earlier in December, a Lilly sponsored trial that drew head-to-head comparison between its Zepbound and Novo Nordisk’s Wegovy established the former’s superiority as an anti-obesity treatment.
Zepbound enabled patients lower their body weights by more than 20% in that trial over 72 weeks versus a significantly lower 13.7% reduction in weight observed for Wegovy.
Novo Nordisk shares do not currently pay a dividend to appear any more attractive for the income investors either.
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