Danish pharmaceutical giant Novo Nordisk witnessed a staggering $100 billion erosion in market value following disappointing results from its latest obesity drug trial. The company’s shares experienced their most significant single-day decline since August 2023, highlighting the fierce competition in the rapidly expanding weight-loss medication sector.
The phase III trial of CagriSema, positioned as the successor to the company’s successful Wegovy treatment, achieved a 22.7% weight reduction in patients, falling short of the anticipated 25% target. This shortfall triggered an immediate market response, with shares plummeting by 27% in Copenhagen before settling at a 20% decline across both Danish and New York trading.
Despite the market’s harsh reaction, Novo Nordisk’s executive vice-president for development, Martin Holst Lange, maintained an optimistic stance, noting that only 57% of trial participants reached the maximum dosage. The company plans to initiate new trials in early 2025 to optimise dosing protocols, with regulatory submissions targeted for late 2025.
The trial encompassed 3,400 participants with specific body mass index (BMI) criteria, examining the effectiveness of CagriSema, which combines semaglutide – the active component in Wegovy – with cagrilintide, a molecule mimicking the pancreatic hormone amylin.
Industry analysts have responded critically to the results. Union Investment shareholder Markus Manns labelled it a “worst-case scenario,” while Jefferies analyst Peter Welford described it as a “festive shock.” The setback benefits rival Eli Lilly, whose shares rose 6% as investors reassessed the competitive landscape in a market projected to reach $150 billion by the early 2030s.
The disappointment marks Novo Nordisk’s second clinical trial underperformance in recent months, following September’s monlunabant trial results. The company continues to face challenges including supply constraints for Wegovy and mounting political pressure regarding pricing structures.
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