Novo Nordisk (NYSE:NVO) Slides as Weight-Loss Drug Trial Misses Expectations

Shares of Novo Nordisk (NVO) plunged in pre-market trading following the Danish pharmaceutical company’s disappointing late-stage trial results for its experimental weight-loss drug, CagriSema. Meanwhile, shares of NVO’s rival, Eli Lilly (LLY), saw a gain in pre-market trading.

NVO’s CagriSema’s Trial Misses Forecasts

The trial revealed that CagriSema enabled patients to achieve an average weight reduction of 22.7% after 68 weeks. This result fell short of the 25% weight loss forecasted by the company, dampening hopes that the drug could emerge as the next-generation treatment in the obesity space, following the success of Novo’s blockbuster drug, Wegovy.

CagriSema is an injectable drug consisting of a fixed-dose combination of cagrilintide and semaglutide, each at 2.4 mg. While semaglutide is the active ingredient in Novo’s popular weight-loss drug, Wegovy, cagrilintide is a nascent amylin analog with promising weight-loss potential.

Novo Defends CagriSema’s Performance

Despite missing its target, Novo Nordisk remains optimistic about CagriSema’s potential. The company told CNBC that CagriSema had outperformed Wegovy in weight reduction and that its performance was “on par with best-in-class treatments.” Martin Holst Lange, Novo’s EVP for Development, stated, “We are encouraged by the weight loss profile of CagriSema, demonstrating superiority over both semaglutide and cagrilintide in monotherapy in the REDEFINE 1 trial,” adding that this was achieved even though only 57% of patients reached the highest CagriSema dose.

While the trial results may have disappointed investors, Novo Nordisk is determined to explore the “additional weight loss potential of CagriSema.”

This comes as competition in the weight-loss drug market intensifies, with major pharma players like Novo Nordisk and Eli Lilly vying for dominance. The market, which is projected to be worth $200 million over the next decade, could see further innovations and rivalries as the industry grows.

Is Novo Nordisk a Buy, Sell, or Hold?

Analysts remain cautiously optimistic about NVO stock, with a Moderate Buy consensus rating based on four Buys and three Holds. Over the past year, NVO has increased by more than 2.5%, and the average NVO price target of $147.80 implies an upside potential of 42.9% from current levels.

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