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Novo Nordisk on Monday revealed weaker-than-expected data from a second late-stage trial of its obesity drug candidate CagriSema, knocking shares and stoking worries that rival Eli Lilly may be gaining an edge over the company in the weight-loss drugs market.
Investors and analysts have awaited the readout of Novo's REDEFINE 2 late-stage trial, hoping it would show that next-generation CagriSema was a more potent successor to Novo's blockbuster Wegovy for obesity and that its weight-loss potential was greater than that of Mounjaro, Lilly's (LLY.N), rival to Wegovy.
Monday's data demonstrated that CagriSema does deliver better weight-loss than Wegovy.
"However, the market wants Novo to have the best weight loss agent, which is clearly not the case," Novo shareholder Markus Manns told Reuters. "Novo's main mistake was to set expectations for CagriSema too high."
The market is punishing Novo because its successor to Wegovy is on par with Mounjaro, he added.
Shares in Novo Nordisk closed down 8 % on Monday after the data.
The new data released on Monday was based on a trial of about 1,200 people with type 2 diabetes and a body mass index of or above 27 after 68 weeks.
Like the REDEFINE 1 trial, which included patients who were overweight or obese but did not have type 2 diabetes, REDEFINE 2 was based on a flexible protocol, allowing patients to modify dosing throughout the trial, Novo Nordisk said in a statement.
Weight loss in the trial on CagriSema was 13.7 % after 68 weeks, when including even the participants that dropped out of the trial.
Weight loss on CagriSema was 15.7 % when including only those participants who stayed on treatment, compared to 3.1 % with a placebo.
After 68 weeks, 61.9 % of patients treated with CagriSema were on the highest dose, it added.
SALES ESTIMATES 'TOO OPTIMISTIC'
Jefferies analysts said in a note that 13.7 % weight loss was short of the 15 % or higher they believed was needed to show the drug was better than Mounjaro. The data "likely further dents belief" in the sales potential of CagriSema, they wrote.
While analysts' consensus for peak sales of CagriSema was $13 billion, Jefferies analysts said on Monday that was far too optimistic, and estimated peak sales at just $7.25 billion.
Novo plans to submit CagriSema for regulatory approval in the first quarter of 2026, it said on Monday.
That's on track with what it said at quarterly earnings last month, when it pushed back the timeline slightly from end-2025, in order to secure supply chain readiness.
In the United States, the biggest pharmaceuticals market, total weekly prescriptions for Lilly's Zepbound, known as Mounjaro in other markets, now exceed those for Novo's Wegovy.
The data comes after Novo revealed results from a separate trial of CagriSema in December in overweight or obese patients without type 2 diabetes that also disappointed the market, wiping as much as $125 billion off its market value.
SHARES SINK
Novo shares suffered their worst day since the earlier CagriSema data release in December.
This year to date, Novo shares have dropped 12 %, while Lilly's have gained nearly 13 %.
US approvals for Zepbound and Wegovy were based on separate trials in which the Lilly drug helped patients lose more than 22 % of their weight after 72 weeks, while Wegovy led to 15 % weight loss after 68 weeks.
CagriSema is a weekly injection that combines semaglutide, the active ingredient in Wegovy which mimics the gut hormone GLP-1, and a separate molecule called cagrilintide that mimics the pancreatic hormone amylin. The two hormones combined suppress hunger and help control patients' blood glucose.
Several analysts and Manns, the investors, said they were puzzled that Novo had not shared information in the data release about how CagriSema affected the A1C levels, or blood sugar levels on average over 2-3 months, of patients in the trial.
A1C was a secondary endpoint in the trial, and will be shared later this year, a company spokesperson told Reuters.
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