Novo Nordisk shares fall 19% after disappointing trial results; Lilly jumps in the premarket

Shares in the Danish pharmaceutical giant Novo Nordisk plunged more than 24% at one point on Friday after reporting results from a late-stage trial of its experimental CagriSema weight-loss drug that missed expectations.

The maker of the wildly popular Wegovy obesity drug said its new drug candidate helped patients reduce their weight by 22.7%, below the 25% it told CNBC it had previously predicted.

The stock had pared some losses to trade down about 19.35% at 13:10 London time. Shares of rival obesity drug maker Eli Lilly jumped 10% in premarket trade but came off highs to trade about 5% higher.

The trial results are a blow against expectations that CagriSema could become a next-generation obesity drug. The two-drug injectable treatment combines semaglutide, the active ingredient in Wegovy, with the amylin analog Cagrilintide, an early-stage weight loss treatment.

The phase three trial was based on about 3,400 people with obesity, or who were obese with one or more comorbidities, and took place over 68 weeks.

However, in comments to CNBC, Novo said that CagriSema had outperformed Wegovy in terms of weight reduction and that its performance was “on par with best-in-class treatments.”

“We are encouraged by the weight loss profile of CagriSema showing superiority to both semaglutide and cagrilintide in monotherapy in the REDEFINE 1 study. This was achieved even though only 57% of patients reached the highest CagriSema dose,” Martin Holst Lange, executive vice president of development at Novo Nordisk, said in a separate press release.

“With the insights gained from the REDEFINE 1 trial, we plan to further explore CagriSema’s further weight loss potential,” he added.

Novo added that top-line and full results will be presented next year, and that they expect regulatory submission of the drug by the end of 2025. Results from another phase 3 trial, REDEFINE 2, based on adults with type 2 diabetes who are either overweight or obese, are also expected in the first half of next year.

In a note Friday, JP Morgan acknowledged that while the results were disappointing, it continued to see strong potential for the nascent amylin analog drug class, which may be more tolerable than traditional GLP-1 weight-loss treatments.

“Although the overall weight loss for the CagriSema combo was below expectations, potentially due to patients changing their dose down for the combo, we believe that the Amylin mono headline data show efficacy in line with expectations and good tolerability, providing validation of Amylin mono as a treatment approach,” the analysts wrote.

They added that the results lend support to similar competitor amylin analogue drugs Zealand Pharma, whose treatment they described as potentially more effective than CagriSema. Zealand CEO Adam Steensberg told CNBC in October that its Petrilintide drug was its “crown jewel” and that it was looking for a partner to bring it to market.