Novo's Weight Loss Drug Disappoints; Stock Falls Most on Record

Novo Nordisk A/S’s shares fell by the most on record after a failed attempt to leapfrog rival Eli Lilly & Co. in the red-hot market for obesity drugs.

Novo’s experimental obesity shot CagriSema helped patients lose an average of 20.4% of their weight over 68 weeks, short of the 25% weight loss that Novo had repeatedly predicted for its next-generation product.

The study results were roughly in line with the performance of Eli Lilly’s Zepbound shot, which is already on the market and competes with existing Novo treatment Wegovy. Lilly is also working on a next-generation medicine, called retatrutide, which helped people lose up to about 24% of their weight in a mid-sized study last year.

WATCH: Emily Field, Barclays’ head of European pharmaceutical research, says the selloff in Novo Nordisk’s shares is an overreaction.

Novo’s shares plunged as much as 27% in Copenhagen, and are now down 15% for the year after a runup on the strength of Wegovy sales. Shares of Eli Lilly jumped 10% in premarket US trading. The share decline briefly knocked more than $120 billion from Novo’s market value.

The results may suffice for approval for CagriSema, but they leave Novo with issues positioning the drug in the market, Simon Baker, an analyst for Redburn, said in a note. “They sought a superior result to Lilly and got one that is the same,” Baker said.

Novo said it will start another trial in the first half of next year to help find out how best to boost patients’ doses. The company expects to seek regulatory approval for CagriSema toward the end of next year, a spokeswoman said in a statement.

The study is one of the most anticipated this year in the field. Novo has been counting on CagriSema to help it ward off a growing roster of competitors, led by Eli Lilly, in a weight-loss market that’s predicted to grow to nearly $130 billion by 2030.

For more on the results, Paul Sweeney and Norah Mulinda speak with Bloomberg Intelligence senior pharma analyst John Murphy.

--------

Watch Bloomberg Radio LIVE on YouTube

Weekdays 7am-6pm ET

Follow us on X

Subscribe to our Podcasts:

Bloomberg Daybreak

Bloomberg Surveillance

Bloomberg Intelligence

Balance of Power

Bloomberg Businessweek

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals