Novo Nordisk (NVO) faced a sharp sell-off on Friday after unveiling weight loss data for its latest GLP-1 product, CagriSema. Despite demonstrating an average weight loss of 22.7% in a Phase 3 trial, the results fell short of lofty market expectations, leading to a more than 20% drop in Novo’s stock—the company’s steepest decline since 2002.
CagriSema Results: Impressive but Not Enough
The trial results came from nondiabetic adults with obesity and showed significant weight loss, outperforming Novo’s existing GLP-1 drugs:
- Ozempic (diabetes) and Wegovy (weight loss) typically deliver around 15% weight loss.
- CagriSema’s 22.7% average weight loss also edges out competitors like Eli Lilly’s Mounjaro and Zepbound, which provide approximately 21% weight loss.
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However, expectations were set higher. Novo’s management had previously hinted at a 25% weight loss benchmark for CagriSema, fueling market enthusiasm that the drug could significantly outperform rivals.
“This is below the Street’s expectation of 25% and more comparable to the ~21% for Zepbound,” noted JPMorgan analysts. “Only 57% of patients reached the highest CagriSema dose, which may have contributed to the lower-than-expected average weight loss.”
Market Reaction: Lilly Gains the Edge
While Novo shares tumbled, competitor Eli Lilly (LLY) saw its stock surge over 6% on the same day. Lilly’s strong portfolio of GLP-1 drugs, including Mounjaro and Zepbound, is already a formidable rival in the weight-loss market.
Analysts pointed to Lilly’s upcoming innovations as a potential game-changer:
- Retatrutide, currently in late-stage trials, is expected to deliver 25%-30% weight loss and could launch in 2026.
- Lilly’s oral GLP-1 candidate, orforglipron, is also in advanced trials and could redefine convenience for weight-loss medications.
“Lilly is in the driver’s seat,” Jefferies analyst Akash Tewari wrote, citing both its injectable and oral GLP-1 pipeline.
Why Investors Are Disappointed
Novo’s weight-loss trial for CagriSema didn’t just miss internal targets; it also failed to significantly raise the competitive bar in the high-stakes obesity market.
Key Concerns:
- Lower-than-expected dose optimization: Only 57% of trial participants reached the highest dose, limiting potential results.
- Slim margin over competitors: While the data surpasses Novo’s existing drugs, it only slightly beats Lilly’s Zepbound, making the outcome less compelling.
- Timing of new trials: Novo plans further studies to optimize CagriSema dosing, but results will take time to materialize, delaying its competitive edge.
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Analysts at JPMorgan highlighted the timeline gap: “This study will take time to read out, leaving the competitive bar mostly unchanged until Lilly’s retatrutide Phase 3 data arrives in 2026.”
The Road Ahead for Novo Nordisk
While Novo’s existing GLP-1 portfolio continues to dominate the market, the lukewarm reception to CagriSema underscores the fierce competition in obesity and diabetes treatments.
What’s Next for Novo?
- A second Phase 3 trial for diabetic patients is ongoing, with results expected in the first half of 2025.
- Additional studies to optimize CagriSema’s dosing protocol are in the pipeline, though their impact may come too late to counter Lilly’s advancing lead.
For now, Eli Lilly’s momentum in the weight-loss market—bolstered by its strong pipeline and promising trial data—poses a serious challenge to Novo’s dominance.
Novo Nordisk’s CagriSema results showcase its potential but fall short of transforming the weight-loss landscape as investors had hoped. With Lilly gaining ground and new contenders on the horizon, the battle for market share in GLP-1 therapies is far from over.
