Novo Nordisk shares have plunged 20% amid the disappointing trial results of its newest weight-loss drug CagriSema. The autumn worn out €90bn in market valuation on Friday.
Novo Nordisk has introduced its newest trial consequence for the brand new weight problems drug, CagriSema, which upset buyers and despatched its share worth plunging 20% in Denmark on Friday, the sharpest one-day decline in historical past.
The drop worn out €90bn in market valuation, resulting in a 16% decline in year-to-date efficiency for Europe’s largest firm.
CagriSema Falls In need of Expectations
The Danish pharmaceutical big stated in a press launch that the part 3 trial for CagriSema confirmed that the therapy achieved weight lack of 22.7% after 68 weeks, decrease than the projected 25%.
The determine dropped additional to twenty.4% when sufferers failed to stick to the therapy. The consequence sparks issues in regards to the firm’s competitiveness in more and more profitable weight problems and diabetes drug market.
Notably, its US rival Eli Lilly, reported a 24% weight reduction with its newest drugs retatrutide, in response to a trial consequence launched in September. Eli Lilly’s shares surged 10% earlier than pulling again to finish 1.35% larger on Friday. In sharp distinction to Novo Nordisk, the US-based drug maker’s shares are up 32% this 12 months.
Considerations have additionally been raised in regards to the doubtlessly greater-than-expected uncomfortable side effects of the brand new drug, which might have an effect on its market positioning towards rivals. Solely 57% of sufferers reached the very best CagriSema dose, in comparison with 83% with cagrilintide and 70% with semaglutide.
“With the insights obtained from the REDEFINE 1 trial, we plan to additional discover the extra weight reduction potential of CagriSema,” stated Martin Holst Lange, government vp for Growth at Novo Nordisk.
The corporate said: “The outcomes from the second pivotal part 3 trial, REDEFINE 2, in adults with kind 2 diabetes and both weight problems or chubby are anticipated in the course of the first half of 2025.”
Rising competitors in weight-loss drug markets
Lately, main pharmaceutical companies have sped up their growth of weight-loss medication amid surging calls for. As a result of manufacturing constraints, therapy for weight problems and diabetes drugs had been in brief provide earlier this 12 months. The marketplace for glucagon-like peptide 1 (GLP-1) medication is anticipated to succeed in a variety between $150bn (€144bn) and $200bn (€192bn) by 2030.
Based on the third-quarter earnings report, Novo Nordisk’s weight-loss drug Wegovy and diabetes therapy Ozempic accounted for 61% of its gross sales within the first 9 months. For the reason that US Meals and Drug Administration’s (FDA)’s approval of Wegovy, the Danish agency’s market valuation has tripled, peaking in June 2024.
Novo Nordisk’s greatest rival is the US-based pharmaceutical agency, Eli Lilly, with a market captalisation of $691bn (€662bn), almost double that of Novo. Eli’s corresponding weight-loss medication, Zepbound and diabetes therapy Mounjaro, have positioned the agency as a formidable rival.
The US stands as the first market of Novo Nordisk for diabetes drug gross sales, representing 35% of its total income by August this 12 months.
Based on a Reuters report in August, the 2 corporations are anticipated to separate the weight-loss market share evenly by the tip of this 12 months.
Nevertheless, the disappointing trial outcomes for CagriSema are prone to mood analysts’ expectations for Novo’s future progress. The patent for Wegovy will expire within the early 2030s, including strain on the corporate to expedite the event of its next-generation medicines.