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A version of this article first appeared in CNBC’s Healthy Returns newsletter, which brings the latest health-care news straight to your inbox. Subscribe here to receive future editions.
Novo Nordisk isn’t catching a break this year.
Shares of the Danish drugmaker plummeted on Monday after it released data showing that its next-generation 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 in the study — a difference that puts the sales potential of the experimental treatment into question. Analysts all raise the same point: Why would patients or doctors choose Novo’s drug over a more effective and widely-known choice like Zepbound?
“We struggle to identify a reason why a patient would be prescribed CagriSema” instead of Zepbound if the product comes to market, said BMO analyst Evan Seigerman 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 gain [market] share” from Lilly. If anything, it confirms Zepbound as a “clear market leader” and positions Lilly to gain even more market share, he added.
Still, Novo isn’t giving up on the product.
It’s too late anyway: the company already filed for Food and Drug Administration approval of CagriSema, with a decision expected in late 2026. That means that the drug could launch by the end of the year or early 2027.
“To say it’s obsolete is quite belittling a fantastic drug, in all honesty,” Novo’s CEO Mike Doustdar told analysts on Monday, brushing off concerns about CagriSema’s commercial potential. He said he believes the drug has better weight loss efficacy than anything on the market.
Novo is “pleased” with the 23% weight loss that CagriSema caused, which shows that it offers “clinically meaningful additive weight loss effects” that are superior to what’s been seen with drugs that only target GLP-1, Chief Scientific Officer Martin Holst Lange said in a release on Monday. That includes semaglutide, the active ingredient in Novo’s existing obesity injection Wegovy. CagriSema combines semaglutide and cagrilintide, another hormone released in the pancreas that affects appetite.
Lilly’s Zepound helped people lose around 25% of their weight in the trial, but Doustdar called that an “abnormality” that has not been seen in any other studies.
Novo is also pinning its hopes on other upcoming trials to show CagriSema’s full weight loss potential.
That includes the REDEFINE 11 trial, a phase three study that will compare CagriSema to a placebo in 600 adults with obesity. The initial results from that trial are expected in the first half of 2027.
But Novo has much to prove to Wall Street. BMO’s Seigerman said he’s not convinced that 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.
The standard doses of Wegovy cause around 15% to 16% weight loss, while the high dose comes closer to 21%, he said.
Regardless of how CagriSema performs, Novo needs to find a strong competitor to Lilly’s drugs. Zepbound’s higher efficacy has allowed it to win significant market share, and Lilly is planning to launch a next-generation obesity drug that targets three gut hormones and has promoted more than 28% weight loss in clinical trials.
Novo last year 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, with Novo’s product still in early-stage development, M&A could offer a faster path forward.
Doustdar told me in January that Novo plans to be an active dealmaker to “see if anyone else out there has something that can complement our own pipeline.”
Feel free to send any tips, suggestions, story ideas and data to Annika at a new email: annika.constantino@versantmedia.com.
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