Novo Nordisk sheds billions in value on obesity data

Less-than-stellar phase 3 results with Novo Nordisk's highly anticipated obesity therapy CagriSema have caused its shares to fall by over a fifth, wiping around $94 billion off its market cap.

CagriSema – a combination of Novo Nordisk's GLP-1 agonist semaglutide with dual amylin and calcitonin receptor agonist cagrilintide – achieved a 20.4% reduction in weight in the REDEFINE 1 study over 68 weeks, falling short of the 25% drop signposted by the company as its expectation for the drug.

Crucially, the top-line reduction differed very little from the weight loss seen with Eli Lilly's combined GIP/GLP-1 agonist Zepbound (tirzepatide) at 72 weeks in the SURMOUNT-1 study, which was a significant improvement on Novo Nordisk's main marketed obesity drug – Wegovy – which is based on semaglutide alone.

Novo Nordisk emphasised an interpretation of the data which assumed all subjects in the study adhered to treatment, which gave a weight reduction of 22.7% for CagriSema versus 11.8% with cagrilintide alone, 16.1% with semaglutide, and 2.3% with placebo. The design of REDEFINE-1 allowed patients to lower their doses if they encountered tolerability issues.

Martin Holst Lange, Novo Nordisk's head of development, pointed out that only 57% of patients had received the highest dose of CagriSema, asserting that the company remains "encouraged by the weight-loss profile of CagriSema."

Still, investors were unimpressed, driving shares down 20.7% to DKK 589.20, with some analysts pointing to a side-effect profile for the combination that they suggested was not as good as Zepbound on its own.

As it stands, CagriSema seems to have fallen short of Novo Nordisk's view that the drug would be a next-generation obesity product that would be tough for rivals to beat.

Now, all eyes will be on the results from the second pivotal phase 3 trial, REDEFINE 2, in adults with type 2 diabetes and either obesity or overweight that are expected during the first half of next year and could set up regulatory filings for CagriSema

Novo Nordisk meanwhile is also running a cardiovascular outcomes study in 7,000 adults with established cardiovascular disease with or without type 2 diabetes (REDEFINE 3) and a head-to-head study pitching CagriSema against Zepbound in obesity.

Novo Nordisk and Eli Lilly are currently a duopoly in the obesity market, which reached a value of $24 billion last year according to IQVIA data and has been projected to top $100 million or more in some models, driven by the benefits that obesity drugs deliver beyond weight loss such as reduced cardiovascular risk.

There's no shortage of companies trying to break into the category, however, and the search is on for newer products that can improve on the weight loss achieved by Wegovy and Zepbound. Novo Nordisk is also developing an oral drug for obesity, amycretin, which also performed better than Wegovy in a phase 3 obesity trial and is in mid-stage development.

New approval for Zepbound

Shares in Lilly bounced up after the top-line REDEFINE 1data was announced, although that may have stemmed in part from news of the FDA approving Zepbound for obstructive sleep apnoea (OSA), a sleep-related breathing disorder that is most common in people who are overweight and affects millions of people in the US.

See our article on the Zepbound approval here.