Morgan Stanley expects Novo Nordisk Alzheimer trial to fail as it slashes rating

By Steve Goldstein

Novo Nordisk was downgraded to underweight by Morgan Stanley.

Morgan Stanley analysts say a trial to test whether Novo Nordisk's blockbuster weight-loss drug also will work against Alzheimer's is likely to fail, as it set the most pessimistic target price forecast of any Wall Street bank on the Danish drugmaker.

Morgan Stanley cut Novo Nordisk's (NVO) (DK:NOVO.B) rating to underweight from equal weight and cut the price target on its U.S.-listed stock to $47 from $59.

According to FactSet, only Intron Health has a lower price target, of $46.72.

In premarket trade, Novo shares slipped 3% to $53.80.

Analysts led by Thibault Boutherin say a trial of semaglutide, the key ingredient in Ozempic and Wegovy, has a 75% chance of not reaching statistical significance in reducing dementia, when results are announced in the coming weeks.

That failure should trigger a high single-digit percentage share price decline, they say.

They see other problems, too. Weekly prescription data for Ozempic have been declining over the last few month, while weekly prescriptions for Eli Lilly's (LLY) Mounjaro are growing at a linear trajectory.

They're expecting a 50% cut in price from Medicare Part D for semaglutide and that a head-to-head trial of CagriSema, its next-generation weight-loss drug, versus Lilly's Zepbound won't show differentiation.

-Steve Goldstein

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09-29-25 0536ET