Medical bottles and syringe are seen with Novo Nordisk logo displayed on a screen in the background.
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Novo Nordisk‘s hopes of heralding a new era of obesity treatment with its CagriSema drug have been called into question after a series of trial results sent shares falling.
Headline results from a REDEFINE-2 late-stage trial released earlier this month showed that Novo’s next-generation CagriSema helped obese or overweight adult patients with type 2 diabetes lose 15.7% of their weight over 68 weeks, compared with 3.1% with placebo. This was below the high-teens percentage of weigh loss previously forecast.
A prior late-stage trial published in December showed the drug helped obese or overweight patients with one or more comorbidities, but not type-2 diabetes, lower their weight by 22.7% after 68 weeks, also below the 25% expected.
Both results wiped significant value from Novo’s share price as investors’ hopes of finding a superior alternative to the company’s existing Wegovy injection and rival Eli Lily’s Zebound, both GLP-1 medications, were dashed.
The once darling stock is now down around 50% from its 2024 highs.
“Sentiment toward these guys is as negative as it’s ever been,” Emily Field, head of European pharmaceuticals research at Barclays, told CNBC over the phone Wednesday.
Novo Nordisk
“The stock reaction felt disproportionate, but there’s just no buyers that are offsetting the sellers,” Field said, noting that some U.S. hedge funds were now shorting the stock, either because of the trial results or over wider concerns about high valuations in the weight loss drug industry.
A next-gen obesity treatment
CagriSema is a combination of cagrilintide — a nascent form of weight loss treatment known as an amylin analog — and semaglutide, the active ingredient in Wegovy.
It was hoped that the drug would offer improved weight loss for patients with diabetes, who typically have a tougher time shedding pounds on existing GLP-1 treatments, but the 15.7% weight reduction result from the REDEFINE-2 trial disappointed.
“We had seen potential for CagriSema to demonstrate superior weight loss to Zepbound given the amylin component; however, the CagriSema delta from obese to obese diabetics patients looks very similar to both Sema and Zepbound,” BofA Global Research said in a note last week, adding that the outcomes were “not enough to rebut future competition.”
There’s a very, very short-term focus right now. People just aren’t thinking about the broader potential,.
Emily Field
head of European pharmaceuticals research at Barclays
In the meantime, questions remain around CagriSema’s tolerability, with fewer than two-thirds of patients progressing to the highest dose after 68 weeks. Novo said last week that CagriSema was “well-tolerated” and that the most common adverse effects were gastrointestinal, but they were “mild to moderate and diminished over time.”
“Investors are looking for treatment options that are best in class and will secure Novo’s place in the obesity drug market,” Soren Lontoft, pharma equity analyst at Sydbank, told CNBC over the phone Tuesday. “We’re not sure that the CagriSema is best in class.”
However, an upcoming REDEFINE-4 study, due for release in early 2026, could provide further color on the drug’s efficacy over an extended duration and more flexible dosing — something Lontoft said could set it apart.
“That could yield the superiority,” Lontoft said.
Expanding weight-loss treatments
The weight-loss industry remains divided over the broader applications and outcomes of obesity drugs beyond total weight reduction. In a separate note last week, BofA said it had grown “slightly more cautious on differentiation” in obesity and diabetes treatment following CagriSema’s latest results.
“There’s a very, very short-term focus right now. People just aren’t thinking about the broader potential,” Field noted.
Lontoft nevertheless pointed to the need for a diverse range of treatments to address both obesity and associated health risks, such as cardiovascular disease, sleep apnea and liver disease — areas in which the drugs have already been shown to be making headway.
“It’s about addressing different needs in this market,” he said. “The companies that are able to address these different needs best will — in combination with significant production capacity — take the biggest part of this market,” he said.
Other firms are hoping to get involved in the market, which is estimated to be worth upwards of $100 billion by 2030. Earlier this month, Swiss pharmaceutical giant Roche struck a deal worth up to $5.3 billion to develop Danish biotech Zealand Pharma’s amylin analog obesity drug candidate.
Investors and patients will have to wait sometime for such products to launch, however, with Zealand Pharma’s CEO and President Adam Steensberg telling CNBC that he expects Petrelintide to come to market around 2030. Novo Nordisk, meanwhile, said it expects to file for regulatory approval for CagriSema in the first quarter of 2026.
Still, the company has some way to go to recoup some of the earlier hype around the drug. Asked whether investors would recognize it as one of several possible alternatives to existing heavyweights, Soren was cautious: “No. But I think they will do eventually.”
