Novo Nordisk Surges 10% Premarket, Obesity Drug Trial Exceeds Expectations

Novo Nordisk announced promising early-stage trial results for its amycretin obesity drug, designed for subcutaneous injection. The trial revealed that patients with obesity or overweight treated with amycretin experienced a 22% weight loss after 36 weeks.

Following this announcement, Novo Nordisk's U.S. shares surged 10% in premarket trading, breaking out of their recent consolidation range.

Amycretin works by targeting two hormones: GLP-1, which is also mimicked by the company's blockbuster drug Wegovy, and amylin, a pancreas hormone that influences hunger. Martin Lange, Novo Nordisk's head of development, stated, "The results seen in the trial support the weight-lowering potential of this novel unimolecular GLP-1 and amylin receptor agonist, amycretin, that we have previously seen with the oral formulation."

In addition to the injectable version, Novo Nordisk is also developing amycretin as a weight-loss pill. In an earlier trial, the oral version helped obese participants lose 13.1% of their weight after 12 weeks of treatment.

Will the Weight-Loss Drug Hype Make a Comeback?

Weight-loss drugs and AI were the two dominant investment themes in the first half of 2024, with Novo Nordisk and Eli Lilly becoming as prominent as the Magnificent 7 tech giants. 

However, the second half of the year saw a sharp reversal. Disappointing trial results, underwhelming revenues from flagship drugs, intensified competition in the weight-loss drug market, and the inclusion of such drugs in healthcare reimbursement negotiations all contributed to significant declines in the stock prices of the two industry leaders.

Now, with Novo Nordisk's new trial data exceeding expectations, there's speculation that the weight-loss drug boom could reignite. This development may draw renewed investor attention to the sector, potentially reviving the excitement that characterized the first half of 2024.