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Novo Nordisk will not have a break this year.
The Danish drugmaker's shares plunged on Monday after it released data showing its next-generation anti-obesity drug failed to match the weight loss of Eli Lilly's Zepbound in a phase three trial.
The results showed that Novo's drug, CagriSema, promoted slightly less weight loss than Zepbound at 84 weeks into the study, a difference that calls into question the sales potential of the experimental treatment. All analysts make the same point: Why would patients or doctors choose Novo's drug over a more effective and widely known option like Zepbound?
“We struggle to identify a reason why a patient would be prescribed CagriSema” instead of Zepbound if the product comes to market, BMO analyst Evan Seigerman said in a Monday note.
In a separate note on Monday, JPMorgan analyst Chris Schott said the results “will make it difficult for the product to win [market] If anything, it confirms Zepbound as a “clear market leader” and positions Lilly to gain even more market share, he added.
Still, Novo is not giving up on the product.
It's too late anyway: The company has already applied for approval of CagriSema from the Food and Drug Administration, with a decision expected by the end of 2026. That means the drug could launch at the end of the year or early 2027.
“To say it's obsolete is quite the understatement of a fantastic drug, in all honesty,” Novo CEO Mike Doustdar told analysts on Monday, downplaying concerns about CagriSema's commercial potential. He said he believes the drug is more effective in losing weight than any other on the market.
Novo is “pleased” with the 23% weight loss caused by CagriSema, showing that it offers “clinically significant additive weight loss effects” that are superior to what has been seen with drugs that only target GLP-1, chief scientific officer Martin Holst Lange said in a statement Monday. That includes semaglutide, the active ingredient in Novo's current obesity shot, Wegovy. CagriSema combines semaglutide and cagrilintide, another hormone released in the pancreas that affects appetite.
Lilly's Zepound helped people lose about 25% of their weight in the trial, but Doustdar called it an “anomaly” that has not been seen in any other studies.
Novo is also pinning its hopes on other upcoming trials to demonstrate the full weight loss potential of CagriSema.
That includes the REDEFINE 11 trial, a phase three study that will compare CagriSema to a placebo in 600 adults with obesity. Initial results from that test are expected in the first half of 2027.
But Novo has a lot to prove to Wall Street. BMO's Seigerman said he's not convinced the upcoming trial “is going to change the narrative around CagriSema.”
Novo also expects to begin a phase three trial investigating a higher dose of CagriSema in the second half of 2026. On the call with analysts, Doustdar suggested that the greater efficacy seen with a higher dose of Wegovy could translate to CagriSema.
Standard doses of Wegovy cause between 15% and 16% weight loss, while the high dose is closer to 21%, he said.
Regardless of CagriSema's performance, Novo needs to find a strong competitor for Lilly's drugs. Zepbound's increased effectiveness has allowed it to gain significant market share, and Lilly plans to launch a next-generation anti-obesity drug that targets three gut hormones and has promoted more than 28% weight loss in clinical trials.
Last year, Novo paid $2 billion for the rights to a Chinese drugmaker's experimental medicine, which works in the same way as Lilly's upcoming treatment.
However, since Novo's product is still in an early stage of development, mergers and acquisitions could offer a faster path forward.
Doustdar told me in January that Novo plans to be an active dealmaker to “see if anyone else has something that can complement our own portfolio.”
Feel free to send any tips, suggestions, story ideas and facts to Annika at a new email: [email protected].
