Novo Nordisk's CagriSema Weight-Loss Drug Deemed 'Obsolete' After Trial Disappointment
Novo Nordisk, the owner of popular weight-loss medications Wegovy and Ozempic, has faced a significant setback as its highly anticipated new treatment, CagriSema, was labelled "obsolete" following disappointing clinical trial results. The Danish pharmaceutical giant's shares fell sharply on Monday after the drug failed to meet investor expectations in a late-stage study.
Clinical Trial Results Fall Short
The weekly injection CagriSema, which combines an amylin analogue with GLP-1 to regulate metabolism and suppress appetite, was expected to outperform Novo Nordisk's existing GLP-1 jabs. However, in a study involving 809 people, it led to an average weight loss of 23% after 84 weeks with full adherence, compared to 25.5% for tirzepatide, the active ingredient in Eli Lilly's leading anti-obesity drug Zepbound. This fell short of initial expectations of 25% weight loss and did not achieve its primary endpoint of demonstrating non-inferiority to tirzepatide.
Søren Løntoft Hansen, a senior analyst at AL Sydbank, commented on the results, stating, "This is something of a swing and a miss." He added that it remains unclear whether this data will influence Novo Nordisk's decision to launch CagriSema on the market.
Market Impact and Analyst Reactions
Novo Nordisk's share price plunged by 16% on the news, contributing to a nearly 60% loss over the past year, while Eli Lilly's stock rose by more than 3% in pre-market trading. The company, which had become Europe's most valuable firm due to booming sales of weight-loss and diabetes drugs, has repeatedly slashed profit and sales estimates as it lost ground to Lilly.
Analysts at UBS, who had already lowered their peak sales forecast for Novo's GLP-1 drugs from $80 billion to $75 billion by 2032 following earlier disappointing trial results, described the latest findings as "significant negative." They noted that an inferior result to tirzepatide was very unexpected.
Emmanuel Papadakis at Deutsche Bank told Novo management on an investor call, "Commiserations on the results. CagriSema looks somewhat obsolete now as a competitive upgrade of semaglutide ... or as a competitive alternative to tirzepatide." In response, Novo's chief executive, Mike Doustdar, rejected the comments, calling CagriSema a "fantastic drug" and highlighting its potential as the first amylin-based product with the best weight loss label when it reaches the market early next year.
Future Prospects and Regulatory Hopes
Novo Nordisk hopes that another trial using a higher dose of CagriSema will yield better results. The company has already submitted the medication to the US drug regulator for approval based on earlier trial evidence and anticipates a decision later this year. Despite the setback, Novo remains optimistic about CagriSema's potential to revive sales, alongside its new Wegovy pill, as it continues to compete in the rapidly evolving weight-loss pharmaceutical market.
