Novo Nordisk (NYSE: NVO) shares tumbled more than 9% in early morning trade Monday after the company released new clinical trial data for CagriSema, its experimental treatment for adults with obesity or overweight and type 2 diabetes. This represents the steepest single-day decline for the stock since December 20, driven by investor disappointment, despite the trial technically meeting its primary goals.
The data comes from the REDEFINE 2 trial, which involved 1,206 participants with a mean baseline body weight of 102 kg. After 68 weeks, those treated with CagriSema achieved an average weight loss of 15.7%.
Novo Nordisk (NYSE: NVO) reported that the trial successfully met its primary endpoint, showing statistically significant and superior weight loss compared to placebo. When analyzed using the treatment policy estimand, which accounts for real-world adherence, CagriSema delivered a 13.7% weight reduction, far outpacing the 3.4% seen in the placebo group.
Despite these promising results, the market reaction was negative. Investors are concerned about the trial’s design, which allowed participants to self-select their dose of CagriSema. By the end of the study, fewer than two-thirds of participants were using the highest dose of the drug. This flexibility has raised doubts about the drug’s reliability and effectiveness outside a controlled clinical setting, potentially limiting its commercial appeal.
The news had a ripple effect beyond Novo Nordisk. Shares of Eli Lilly (NYSE: LLY), a key rival in the obesity drug market with its approved treatment Zepbound, slipped 1.3% in premarket trading.
Analysts from Jefferies offered a critical take on the results. They said,
“REDEFINE 2 headlines for CagriSema in obese diabetics likely further dent belief in its commercial profile, in our view.”
The firm added,
“Weight loss of 13.7% falls short of our 15+% bar that would have suggested amylin offers a differentiated profile vs GLP-1 in this population, with result in-line with GLP-1s that show 30%-35% less weight loss in diabetics, plus again appearing similar to Zepbound.”
