To The Moon

TMTPOST --  Novo Nordisk A/S shares plummeted as much as 27%, wiping up to $125 billion off in the market value, and settled 20.8% lower on Friday. Shares registered their worst day since listing in 2002 after the Danish drugmaker released disappointing trail results for its experimental weight-loss drug CagriSema.

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Novo Nordisk announced headline results from a REDEFINE 1, a large phase 3 trial of a 68-week efficacy and safety investigating subcutaneous CagriSema, a fixed dose combination of cagrilintide 2.4 mg and semaglutide 2.4 mg, compared to the individual components cagrilintide 2.4 mg, semaglutide 2.4 mg and placebo, all administered once-weekly. CagriSema is a combination of semaglutide—the medicine sold under the brand names Ozempic and Wegovy—and cagrilintide, another medicine.  

Novo Nordisk found through the trail that  if all people adhered to treatment, people treated with CagriSema achieved a weight loss of 22.7% after 68 weeks compared to a reduction of 11.8% with cagrilintide 2.4 mg, 16.1% with semaglutide 2.4 mg and 2.3% with placebo alone. When applying the treatment policy estimand, or treatment effect regardless of treatment adherence, people treated with CagriSema achieved a superior weight loss of 20.4% compared to a reduction of 11.5% with cagrilintide 2.4 mg, 14.9% with semaglutide 2.4 mg and 3.0% with placebo.

Eithther the 22.7% or the 20.4% of patients’ body weight loss, on average, fell short of the 25% weight loss that Novo Nordisk projected previously for its next-generation drug. The company has predicted CagriSema will help patients lose “at least 25%” of their body weight. That would make it the most effective treatment yet, in terms of pounds lost in a large clinical trial. However, the 22.7% rate is about the same efficacy as Zepbound, the Eli Lilly & Co. obesity drug that has already hit the market as a rival of Novo treatment Wegovy. Lilly is also working on an experimental shot called retatrutide, which helped people shed as much as 24.2% of their weight in a mid-sized study last year.

Still, Novo Nordisk plans to  submit CagriSema for regulatory approval towards the end of 2025, according to a statement late Friday. It said it also plans to start a new trial of CagriSema in the first half of next year, and would work to improve how the dosage of CagriSema that patients take is ramped up in that trial. “The 22.7% weight loss is significantly higher than Wegovy and on par with best-in-class treatments,” Novo said. “The trial permitted dose reductions, and statistically significant results were achieved even though only 57% of patients on CagriSema reached the highest dose.”

Novo Nordisk’s latest trial results disappointed the Wall Street and raised severe concerns about sales outlook of CagriSema. Analysts had expected the next-generation product of Novo would be a step up from Zepbound. They had been anticipating CagriSema sales would hit $15.6 billion a year by 2029, according to FactSet.

Novo’s trial results seemed to cement its arch-rival Eli Lilly’s leadership in the obesity market. Lilly’s Zepbound has already shown better efficacy than Novo’s currently available drug Wegovy in a head-to-head trial. Lily shares gained as much as 7.1% before finishing nearly 1.4% higher on Friday.

Lilly is now the “preeminent player in the market,” Mizuho’s Jared Holz said in a note. Citi analyst Geoffrey Meacham called it “nearly a best-case scenario” because Novo’s shot could have eroded Lilly’s market share in the heaviest patients.