Novo Nordisk Shares Plunge 9.55% as Alzheimer’s Trial Failure Sparks Growth Concerns

The share price fell to its lowest level since November 2018 today, with an intraday decline of 9.55%.

The selloff follows the failure of Novo Nordisk’s semaglutide-based Alzheimer’s trials, which showed no statistically significant efficacy in slowing cognitive decline. The drug, already a blockbuster in diabetes and obesity, had been touted as a potential breakthrough in neurodegenerative disease. However, the lack of clinical benefits in 3,808 participants has raised concerns about the company’s pipeline diversification. Analysts highlight the competitive landscape, noting rivals like Eli Lilly and Biogen have already secured Alzheimer’s market positions, while Novo Nordisk’s reliance on its core GLP-1 drugs faces pressure from slowing sales growth and regulatory efforts to lower drug prices in the U.S.

Compounding the setbacks, Ozempic and Wegovy’s revenue growth is plateauing amid market saturation and increased competition from other GLP-1 analogs. Regulatory interventions, including price caps and expanded insurance coverage, threaten Novo Nordisk’s pricing power. Meanwhile, Morgan Stanley’s September 2023 downgrade underscored broader skepticism about the company’s long-term growth strategy. Despite CEO Martin Holst Lange’s emphasis on semaglutide’s strengths in diabetes and obesity, the Alzheimer’s trial failure signals the risks of overextending into unproven therapeutic areas. With the stock down nearly 6% in recent trading and nearly 50% year-to-date, investors are now weighing whether Novo Nordisk can refocus on its core markets or face prolonged valuation pressures.