Novo Nordisk announced on Friday disappointing results from a late-stage trial of its experimental next-generation obesity drug Kaglisema, wiping its market value by $125 billion.
The drug candidate's lower-than-expected weight loss is a blow to the Danish company's ambitions to replace its weight-loss drug Wegoby, which is more powerful than Eli Lilly's rival Zepbound (also known as Munjaro).
Investors and analysts were looking forward to the data as proof of Novo's case for having a strong drug pipeline second only to Wegoby in the competitive anti-obesity drug market.
The Kagrisema trial showed the drug was effective in reducing patients' weight by 22.7%, which was lower than the 25% that Novo Nordisk had expected.
Novo's shares fell by as much as 27% after the results were announced, the biggest single-day drop in history for a European company and the lowest since August 2023. On Friday, the company's Denamku-listed shares closed down 21%.
Shares of U.S. peer Lilly rose 2%.
“Worst case scenario”
Novo said that if everyone adhered to treatment with Kaglisema, overall patients achieved a 22.7% weight loss after 68 weeks, and 40.4% lost more than 25%.
CagriSema is a once-weekly injection that combines Wegovy's active ingredient, semaglutide, which mimics the intestinal hormone GLP-1, with another molecule called cagrilintide, which mimics the pancreatic hormone amylin.
The combination of the two hormones suppresses hunger and helps patients control blood sugar.
Marcus Manns, a portfolio manager at mutual fund firm Union Investment, which owns Novo and Lilly, said the result was a “worst-case scenario” for Novo.
“CagrisSema is just as good as Zepbound, but it is more complex to manufacture,” he said.
Lilly's proprietary bariatric injection, sold in the U.S. as Zepbound, led to an average weight loss of nearly 23% in clinical trials.
Data from Novo's CagriSema Phase III study included approximately 3,400 people with a body mass index (BMI) of 30 or higher, or a BMI of 27 and at least one weight-related comorbidity, such as hypertension or cardiovascular disease. .
Investor Manns said Novo's management should have set more conservative targets, such as aiming for the same dramatic weight loss as Wegobee and Zepbound.
“Predicting the outcome of Phase 3 is more of an art than a science, but I think it was a strategic mistake to set expectations so high,” he said.
new attempt
Martin Horst Lange, executive vice president of development at Novo Nordisk, said Novo Nordisk was “encouraged” by the data.
He said only 57% of patients in the trial reached the highest dose.
Alexander Jenke, a portfolio manager at Medical Strategies in Munich and a shareholder in Novo, said this could indicate a problem with tolerability in some patients.
He said there may have been a higher incidence of gastrointestinal adverse events such as nausea, vomiting and diarrhea.
Michael Novod, an analyst at Nordea, said the injections may have been discontinued after patients achieved satisfactory weight loss.
Novod said that while the trial was unexpected, the harsh stock price reaction was overdone.
“Despite the disappointing results, CagriSema still has the highest weight loss efficacy reported in a Phase 3 trial,” he said.
Investors noted that in the other two patient groups in the trial that received only kagurilintide or semaglutide, the proportion of patients who reached the highest dose was much higher: 83% in the kagurilintide group and 83% in the semaglutide group. It was 70%.
The company did not respond to requests for comment on why more patients did not reach the highest dose.
Novo said in a statement that the drug has similar side effects compared to its GLP-1 drugs already on the market.
The most common adverse events with CagriSema were gastrointestinal, with most being mild to moderate and decreasing over time, consistent with the class of GLP-1 receptor agonists, the report said. The book said.
Novo Nordisk plans to begin a new trial in the first half of next year to further investigate the potential for further weight loss of Kaglisema, a Novo Nordisk spokesperson said.
The company plans to submit the drug for regulatory approval towards the end of 2025.
Ahead of the trial results, analysts expect Kagrisema's peak sales could be $20 billion.
cutting edge
Novo's trial is the most advanced amylin drug candidate currently being tested on the market.
Shares in Danish pharmaceutical company Zealand Pharma are also testing a weight loss drug candidate that mimics the pancreatic hormone amylin. fell after the data.
Wegovy's success has made Novo Europe the largest company by market capitalization, with a value of more than $460 billion.
Some analysts predict that the obesity drug market could reach a global value of about $150 billion annually by the early 2030s.
There are concerns that Novo is losing its first-mover advantage in the obesity drug race that has sent its stock price down this year.
Pressure to find a more powerful successor to Wegovy increased after Lilly released data from a late-stage trial in early December that compared Zepbound and Wegovy and showed that Zepbound was more effective. .
