A view shows a Novo Nordisk sign in front of its office in Bagsvaerd, outside Copenhagen, Denmark, July 14, 2025.
Little Tom | Reuters
Novo Nordisk shares fell to a four-year low on Monday after the Danish pharmaceutical company said a long-awaited trial for Alzheimer's disease failed to meet its primary goal.
The trial tested whether semaglutide, the active ingredient in the successful diabetes and weight loss drugs from Novo, Ozempic and Wegovy, helped slow the progression of Alzheimer's disease.
While semaglutide treatment resulted in an improvement in biomarkers related to Alzheimer's disease in two separate trials, this did not translate into a delay in disease progression, Novo said in a statement Monday. The goal had been to stop the patients' cognitive deterioration by at least 20%.
Novo shares fell 10% to 274 Danish crowns ($42.33) in afternoon trading, their lowest level since mid-2021. The shares later regained some ground to preliminarily close the session down 5.8%.
Before the results, analysts had called the test a long shot, while Novo himself had referred to it as a “lottery ticket.”
“Based on the significant unmet need in Alzheimer's disease, as well as a number of indicative data, we felt we had a responsibility to explore the potential of semaglutide, despite the low probability of success,” said Novo Chief Scientific Officer Martin Holst Lange.
A long shot
The trial results are a setback for Novo investors who had hoped it could revive the company's battered share price. Even before Monday's reading, Novo shares had halved so far this year amid a series of guidance cuts and increased competition, especially in the key US market.
“While hopes for a positive reading were not high, the potential success had perhaps kept something in the name, with this result eliminating a near-term bullish scenario,” Jefferies analysts wrote on Monday.
Alzheimer's disease, the most common form of dementia, is notoriously difficult to treat. It is also expected to affect an increasing proportion of people around the world as populations age.
Current treatments such as Eli Lilly's Kisunla and Biogen/Eisai's Leqembi have been shown to slow disease progression by up to a third, but carry the risk of serious side effects. Actions of Eli Lilly traded almost 0.8% higher on Monday at the close of the London session, while biogen Shares rose 2.6%.
Novo's decision to try Rybelsus, an oral form of semaglutide, was based largely on real-world evidence suggesting a correlation between Alzheimer's and taking semaglutide.
The drug works similarly to Lilly's rival drugs Mounjaro and Zepbound by mimicking the gut hormone GLP-1, which is naturally produced in the body, to regulate blood sugar levels and improve feelings of satiety. It's still unclear how GLP-1 might benefit Alzheimer's patients, but the theory is that it targets the neuroinflammation that is thought to affect them.
Highlights will be presented at the Alzheimer's Disease Clinical Trials conference on Dec. 3, and full results will be presented at the 2026 Alzheimer's and Parkinson's Disease Conference in March, Novo said.
A competitive market
While Novo Nordisk's shares have plummeted over the past 18 months, rival Eli Lilly last week became the first pharmaceutical company with a market capitalization of $1 trillion.
Although Ozempic came to market four years before Mounjaro, Novo's advantage hasn't stopped Lilly from quickly gaining market share in the US.
This year, Novo has cut its guidance several times, blaming so-called compounders who sell copycat versions of semaglutide at a cheaper price.
Novo recently replaced its chairman and half of its board members due to a disagreement between the previous board and Novo's majority shareholder, the Novo Nordisk Foundation, over the scope and pace of necessary change. It came just months after former CEO Lars Fruergaard Jørgensen was fired after an eight-year reign due to falling shares.
The old board of directors was “too late to recognize the importance of market changes in the United States,” the new president, Lars Rebien Sørensen, said at the time.
New CEO Mike Doustdar, who previously led Novo's overseas U.S. operations, quickly set about refocusing the company's business priorities toward its core obesity and diabetes businesses and cutting more than 10% of its global workforce.
