Novo Nordisk’s next-generation weight-loss drug CagriSema has been labelled obsolete before it even hits the market after the pharma giant’s trial results failed to match the performance of existing obesity drugs from rival Eli Lilly.
Novo’s shares dived more than 16 per cent on the news and are trading at levels last seen in 2021, back before the company started the anti-obesity GLP-1 craze. Novo had a market monopoly on the injectable weight-loss drugs until competition emerged last year.
The trigger for the latest share dump was a market announcement on Monday in Denmark revealing that people treated with a standard dose of Novo’s CagriSema in a trial achieved 20.2 per cent weight loss after 84 weeks, compared with 23.6 per cent for Lilly’s tirzepatide.
A spokesman said the results showed the new drug “was not deemed ‘non-inferior’ to (Eli Lilly’s) tirzepatide, in this particular trial at least.”
Outsiders had a more brutal interpretation.
“The trial has backfired,” Michael Shah, a Bloomberg Intelligence analyst, said. “The base case” was CagriSema showing weight loss in line with Zepbound, Eli Lilly’s brand name for tirzepatide. Not even achieving that, he said, “was unexpected and extends Lilly’s advantage.”
Chris O’Donnell, founder of Australian health group My Weight Loss Clinic, is more sanguine about this race for the best results.
“The reality is, is that we need a range of different compounds, because they’re not going to suit everybody,” he said.
And he points out these controlled trials are very different from the real experience of many users who don’t get the same support. Data in Australia shows that, without proper support, the average user is only on the medication for nine to 12 weeks.
“So the typical Australian is only taking this medication for around about three months, and then is stopping.”
Dr Kieran Dang, the chief medical officer at Mosh, also played down the weight-loss metrics from the trial.
“Both are large amounts of weight that is more than what many people using medical weight loss products are aiming for,” he said.
“It’s important that patients always combine these medications with a structured weight loss program. In the real world, this can often make a much larger difference than which medication is used,” he added.
Novo has innovations that may help, like its consumer anti-obesity drug Wegovy being available in pill form in the US. But Lilly’s Zepbound, sold in Australia as Mounjaro, has been widely accepted here as a more effective weight-loss drug.
It’s reflected in the fact that Novo has now lost 60 per cent of its market valuation over the last year and wiped out $US475 billion ($672 billion) of shareholder wealth since it peaked in 2024 at more than $US600 billion, when it was Europe’s most valuable company.
The Danish group’s unassailable market has now been devoured by Eli Lilly, generic rivals, and Donald Trump’s push to lower pharmaceutical costs for Americans.
Novo’s chief scientific officer Martin Holst Lange told Bloomberg that additional studies needed to be done to assess CagriSema’s “full weight-loss potential.”
A spokesperson said: “because of the large unmet need in obesity, and CagriSema’s strong weight-loss profile, cardiometabolic benefits (heart, liver, kidney) and the proven efficacy of semaglutide with more than 49 million patient years of exposure, we are fully committed to continue studying and launching CagriSema in 2027 … we believe in the power of this biology.”
Earlier, Novo chief executive Maziar Mike Doustdar bristled in response to an analyst’s question about how he might move quickly on a new experimental medicine now that “CagriSema looks somewhat obsolete.”
He said CagriSema showed better weight-loss results than competitors in the kind of large-scale trials used for regulatory approvals.
Doustdar was already under pressure after Novo’s financial results early this month, when it forecast a 13 per cent decline in sales this year as the price war for obesity drugs hit sales and its bottom line.
And Eli Lilly is not the only competition.
This month, Novo sued obesity drug retailer Hims & Hers, alleging infringement on its IP with a “knock-off” version of Wegovy. Hims & Hers, which has sold its own brand versions of the semaglutide obesity drug, pulled the product and its shares declined sharply in response.
Hims & Hers acquired Aussie weight loss start-up Eucalyptus last week, which has offered a similar business model to its new owner, for $1.6 billion. The US company has the right to pay for much of that with its shares, which have lost more than 50 per cent of their value in the year to date.
On Monday (US time), Hims & Hers confirmed it forecasts sales within market expectations for the year – provided it could continue to sell its own version of the top brand weight-loss drugs.
Novo says it will continue testing of its latest obesity drug.
“We will also initiate a new Phase 3 CagriSema high-dose trial in the second half of 2026, aiming to expand treatment options for people with obesity,” a company spokesperson said.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
