Novo Nordisk's stock closes at 4-year low after its next-gen weight-loss drug lost to Lilly's in Phase 3 trial

By Steve GoldsteinJaimy Lee

The Danish company's CagriSema didn't produce as much weight loss as Eli Lilly's Zepbound

Novo Nordisk says a study found its experimental next-generation drug didn't reduce as much weight as Eli Lilly's Zepbound.

Novo Nordisk shares closed at their lowest price in four years on Monday after the struggling Danish pharmaceutical said a head-to-head study found a drug in development didn't cut as much weight as Eli Lilly's therapy.

Novo Nordisk pitted CagriSema against Eli Lilly's tirzepatide, which is sold under the brand name Mounjaro for Type 2 diabetes and Zepbound for obesity.

While CagriSema achieved 23% weight loss after 84 weeks of treatment in an open-label Phase 3 trial, those taking tirzepatide achieved weight loss of 25.5%, according to Novo Nordisk. The company said CagriSema appeared to be safe and well-tolerated.

William Blair's Andy Hsieh described the result "as the worst-case-scenario" for Novo.

Novo Nordisk's U.S.-listed shares (NVO) (DK:NOVO.B) closed 16.4% lower on Monday. Lilly's stock (LLY) gained 4.9% to close at $1,058.56.

CEO Mike Doustdar told analysts on a conference call that the company still has high hopes for CagriSema, which is a combination of an amylin analogue called cagrilintide and semaglutide, the active ingredient in Wegovy and Mounjaro.

"You have to go back to how products are sold, and they are sold according to their label," he said. "There is an abnormality with this trial and how the competitor product has done."

Executives cited two issues with the trial; it was open label, and several of study's investigators were familiar with Zepbound after having worked on that drug's trials.

"Open-label studies drive bias," Martin Holst Lange, Novo's chief scientific officer, said during the call.

Analysts, however, are unlikely to buy that argument. Analysts at JPMorgan say the Wall Street consensus for CagriSema will come down considerably, though there will be to some degree an upward projection of sales for existing drugs Wegovy and Ozempic. JPMorgan had previously estimated 2030 sales from CagriSema of 55 billion kroner, or about $9 billion.

Novo Nordisk is still awaiting a Food and Drug Administration decision on CagriSema, a once-a-week injectable, which it expects late in the year.

That label will be based on earlier trials, Doustdar pointed out.

The drugmaker also said it will start a separate Phase 3 study studying CagriSema at a higher dose in the second half of the year.

Novo Nordisk stock has suffered as the company has struggled to meet demand for its weight-loss drug and fight off competition from Lilly as well as so-called compounders like Hims & Hers Health (HIMS). Its CEO stepped down last year, and the company is laying off thousands of workers as it aims to right-size its business.

Novo Nordisk said it expects this year's sales will fall up to 13% excluding currency swings - despite the launch of an oral version of its weight-loss drug Wegovy - thanks to U.S. government price negotiations as well as competition.

-Steve Goldstein -Jaimy Lee

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02-23-26 1659ET