Novo Nordisk Shares Drop 19% After Disappointing Drug Trial Results

Shares of Novo Nordisk (NYSE:NVO) plummeted over 19% in premarket trading Friday following disappointing results from its phase 3 trial of CagriSema, a next-generation obesity drug.

In contrast, rival Eli Lilly (NYSE:LLY) saw a surge of more than 9%.

The REDEFINE 1 trial for CagriSema, which combines cagrilintide and semaglutide, indicated that participants achieved a weight loss of 22.7% after 68 weeks. Though this result is statistically significant and superior to outcomes from each drug used individually, it did not reach the target weight loss of 25%.

Martin Holst Lange, Novo Nordisk’s executive vice president for Development, noted that this weight loss achievement occurred even though only 57% of patients received the highest dose of CagriSema. He emphasized the company’s intention to explore further weight loss potential with the drug.

The trial involved 3,417 participants who were overweight or obese and assessed the safety and efficacy of CagriSema. It met its primary endpoint by demonstrating a statistically significant weight loss at week 68 compared to a placebo.

Despite some promising signs, the stock market reacted negatively due to the outcomes not meeting expectations. Meanwhile, Eli Lilly's increase in stock value signals growing confidence in its competing obesity treatments.

The results for Novo's second phase 3 trial, REDEFINE 2, focusing on adults with type 2 diabetes and obesity or overweight, are anticipated in the first half of 2025.