Novo Nordisk Shares Plunge Pre-market After Disappointing Trial Results From Its 'Next-gen' Obesity Treatment

Word on the StreetFriday, Dec 20, 2024 6:55 am ET

1min read

Due to the subpar clinical trial results of the new weight loss drug CagriSema, Novo Nordisk's stock once plummeted nearly 27% in pre-market trading in the US. The company's shares listed in Copenhagen also dived more than 22%. Meanwhile, Eli Lilly, Novo Nordisk's biggest competitor in the weight loss drug market, saw its stock rise nearly 12% in pre-market trading in the US.

Novo Nordisk announced today that the results of the REDEFINE 1 trial (Phase III trial of the REDEFINE project) showed that patients who received subcutaneous injections of CagriSema lost an average of 22.7% of their body weight after 68 weeks. If the sample range includes volunteers who dropped out of the trial midway, the average weight loss effect drops to 20.4%, both below the company's expected level of 25%.

However, Novo Nordisk stated that CagriSema's weight loss effect in the REDEFINE 1 trial showed superiority as a monotherapy over semaglutide and cagrilintide, which is encouraging. Despite only 57% of patients receiving the highest dose of CagriSema, this goal was still achieved.

Novo Nordisk's previous generation weight loss drug, Wegovy, works by mimicking the GLP-1 hormone naturally produced by the body after eating. Eli Lilly's popular weight loss drug, Zepbound (also known as Mounjaro), targets GLP-1 as well but adds a second hormone, GIP.

To maintain a leading position in the weight loss drug market, Novo Nordisk's planned launch of CagriSema also combines two intestinal hormones: one is a long-acting GLP-1 receptor agonist, semaglutide, and the other is a long-acting amylin (pramlintide) analog, cagrilintide.

Novo Nordisk previously stated that CagriSema would effectively address the issue of weight regain after discontinuation, would not bring additional side effects compared to the previous generation weight loss drug Wegovy, and would become the most effective weight loss drug to date, expected to be launched in 2026.

However, in today's announcement, Novo Nordisk stated that CagriSema still exhibited gastrointestinal discomfort side effects, similar to GLP-1medications.

Matthias Tschöp, CEO of the Munich Helmholtz Institute and one of the scientists behind the multi-receptor therapy, said that patients taking this dual-action drug can usually lose more weight than those taking GLP-1 alone, without enduring more side effects.

Tschöp explained that the reason for the need to introduce drugs with more significant weight loss effects is that for a large number of obese patients, a weight loss of 15% to 20% is still not enough to get them out of the obese state.

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