Novo Nordisk is under pressure after the Phase 3 trial of its promising weight loss drug Cagrisema delivered disappointing results.
The bad news for the pharmaceutical company Novo Nordisk continues: With their weight loss drug Cagrisema, the Danes did worse than hoped in a phase 3 study. Cagrisema showed a 23 percent weight reduction after 84 weeks of treatment, the company announced on Monday. However, the primary study endpoint was missed. This study should have shown that the product is not inferior to the product Zepbound from US competitor Eli Lilly in terms of weight loss.
Competitive pressure on Novo Nordisk is growing
The tough competition for weight loss products is increasingly causing problems for the Danes, with Eli Lilly in particular putting pressure on the company. While the Americans expect further tailwind from their weight cutter and are expecting a jump in sales and profits again this year, Novo Nordisk has to bake smaller bread and expects less business due to tough price pressure.
Novo Nordisk was originally the first manufacturer to market with its weight reducers and dominated the business. But then the company fell behind in the struggle with Lilly’s competitors, which are considered more effective. There were increasing difficulties for both companies last year because pharmacies and other manufacturers in the USA took advantage of regulatory loopholes and brought cheaper copies of the weight-loss medications onto the market. But Lilly had defended itself more actively against competition from imitators.
In November, Novo Nordisk agreed with the US government on significant price reductions for its blockbusters such as Wegovy and Ozempic, which will, among other things, apply as part of government health programs. Lilly also signed a corresponding agreement.
Lilly boss David Ricks even expects that the market for drugs against obesity will grow even further this year thanks to the agreement with the US government. This had agreed to cover the costs of the funds for more patients as part of the national health program Medicare for the elderly. The Americans are also in a comparatively stronger position than Novo, as their diabetes blockbusters Mounjaro and obesity-fighting Zepbound are still patent-protected for another decade.
Cagrisema not the turning point for Novo?
The hope that Cagrisema could turn things around for Novo is fading with the new study data. Cagrisema is a combination of the drugs cagrilintide and the well-known Novo active ingredient semaglutide. When looking at weight loss over 84 weeks, it performed slightly worse than Lilly’s Zepbound with the active ingredient tirzepatide, which is also used in the diabetes drug Mounjaro.
Novo’s head of research, Martin Holst Lange, is now relying on data from further studies on the administration of Cagrisema, some of which will not be available until the first half of 2027. Novo also wants to test Cagrisema in higher doses – corresponding studies should start in the second half of the year. Later this year, the company also hopes to receive U.S. approval of Cagrisema for other uses from the U.S. Food and Drug Administration (FDA).
Novo Nordisk share price slides due to study data
The renewed setback had a heavy impact on Novo Nordisk’s share price on Monday. The pharmaceutical company’s price in Copenhagen temporarily fell to a low since the summer of 2021. Most recently it fell by 13.75 percent to DKK 259.60.
Analyst James Quigley from Goldman Sachs wrote in an initial comment that the news suggests that Cagrisema has little potential for use. Expert Richard Vosser from JPMorgan assumes that market expectations for the drug will return significantly. However, he also pointed out that an increase in forecasts for the established drugs Ozempic and Wegovy should counteract this to some extent.
The Novo Nordisk news also weighed on shares of packaging maker Gerresheimer, known as a supplier of weight-loss injections, on Monday. The loss for the German SDAX company via XETRA was most recently 4.5 percent to 19.52 euros. In contrast, the shares of Novo competitor Eli Lilly temporarily rose by 3.02 percent to $ 1,040 in pre-market trading on the NYSE.
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