Novo's Alzheimer's Setback Undermines Growth Hopes, Shares Tumble 9.7%

Novo Nordisk A/S's shares fell to a four-year low after the Danish drugmaker announced that its oral semaglutide drug failed to slow Alzheimer's disease progression in two pivotal trials, deepening investor concerns over the company's growth prospects according to market reports. The EVOKE and EVOKE+ studies, which enrolled 3,808 patients with early-stage Alzheimer's, showed no statistically significant benefit of Rybelsus (the oral formulation of semaglutide) over placebo despite improvements in disease-related biomarkers. The results, described as a "high-risk opportunity", dashed hopes of expanding the GLP-1 drug's applications into neurodegenerative diseases and intensified scrutiny of the company's pipeline amid intensifying competition in its core diabetes and obesity markets.

The stock dropped 9.7% in premarket trading, with shares trading at their lowest level since July 2021. The decline reflects broader investor skepticism following a series of setbacks for Novo, including underwhelming data from its cagrisema obesity drug candidate last year and eroding market share against rival Eli Lilly's tirzepatide-based therapies. Morningstar analyst David Dril noted that while the Alzheimer's trial failure was anticipated—Morningstar had estimated a 40% chance of success—the outcome removes a potential revenue stream that was modeled to contribute $1 billion annually by 2031.

Novo's Chief Scientific Officer Martin Holst Lange emphasized the company's commitment to exploring semaglutide's potential despite the "low likelihood of success," citing "real-world evidence" and preclinical data as justification for the trials. The company plans to present full results at the Clinical Trials in Alzheimer's Disease conference in December, though it has already discontinued the one-year extension period of the EVOKE and EVOKE+ trials. Howard Fillit of the Alzheimer's Drug Discovery Foundation offered cautious optimism, suggesting the biomarker improvements could inform future combination therapies.

The failure exacerbates pressure on Novo to deliver in its upcoming U.S. obesity market launch of 25 mg oral semaglutide and its new liver disease indication. Morningstar projects $39 billion in total semaglutide sales by 2030, spread across obesity, diabetes, and other indications. However, analysts at Morgan Stanley had already flagged a 75% probability of the Alzheimer's trial missing its primary endpoint in September, underscoring the challenges of translating GLP-1 drugs into neurodegenerative disease treatments.

Meanwhile, the stock's decline has reshaped the competitive landscape. Eli Lilly shares fell 5% on Wednesday as investors reassessed the broader potential of GLP-1 drugs in Alzheimer's, while Biogen's stock rose 2.7% on speculation about shifting treatment dynamics. Novo's shares have plummeted 48.2% in 2025, putting the company on track for its worst annual performance since 1984. With its Alzheimer's ambitions stalled, Novo's ability to maintain market leadership now hinges on executing its obesity and diabetes strategies amid rising generic competition and pricing pressures.