Novo Nordisk shares rebound despite disappointing CagriSema trial results

Investing.com — Novo Nordisk (CSE:NOVOb) shares jumped over 9% on Monday, despite the company’s disappointing results for its experimental obesity treatment, CagriSema. 

This followed the release of data from the REDEFINE-1 phase 3 trial, which evaluated CagriSema—a combination of cagrilintide, an amylin agonist, and semaglutide, a GLP-1 receptor agonist—for its efficacy in promoting weight loss.

As per analysts at Bernstein, the trial demonstrated a weight loss of 22.7% after 68 weeks of treatment, with a placebo-adjusted result of 20.3%. 

While this outcome was a step up from the individual components alone, it fell short of both expectations and the company’s own projections. 

Novo Nordisk (NYSE:NVO) had modeled a 25% weight loss from the trial, making this result a considerable disappointment for investors, especially given the anticipation surrounding the drug as a potential contender for the title of the highest-efficacy obesity treatment on the market.

Despite CagriSema’s superior performance compared to the individual components—cagrilintide and semaglutide, which achieved weight loss reductions of 11.8% and 16.1%, respectively—the 22.7% weight loss seen in the trial was still underwhelming. 

The trial also highlighted some practical challenges, with many participants remaining on lower doses throughout the study; only 57% of patients had escalated to the high-dose version of the drug by the trial’s end. 

Additionally, Novo Nordisk indicated that the adverse events related to CagriSema were primarily gastrointestinal and were mild to moderate in nature, which did little to dampen the overall sense of letdown surrounding the trial’s results.

Jefferies analysts weighed in, noting that CagriSema’s 20.4% weight loss at 68 weeks closely mirrored the 20.9% seen in Lilly’s Tirzepatide (15mg) at 72 weeks in the SURMOUNT-1 trial. 

However, while CagriSema’s results were similar to Tirzepatide, it fell short of expectations, particularly given the flexibility of dosing in REDEFINE-1, which could have potentially allowed for less-than-optimal dosing. 

Analysts speculated that one reason for the subpar performance was the relatively low proportion of patients who reached the highest dose of CagriSema (57.3%) compared to other therapies, such as Tirzepatide (84.9% in SURMOUNT-1). 

The flexible dosing design in REDEFINE-1 may have led to lower efficacy, despite the study’s efforts to improve gastrointestinal tolerability.

Jefferies further indicated that while Novo Nordisk plans to run another trial in 2025 with less flexible dosing, the tolerability issues surrounding CagriSema might not improve, raising concerns about its future performance. 

This casts a shadow over the prospects for CagriSema, particularly as the focus in the obesity space shifts to better-tolerated and more effective drugs.

In light of these results, Jefferies analysts concluded that Lilly remains in a strong competitive position. Lilly’s Tirzepatide continues to lead the obesity market, and with its next-generation injectable therapies—such as Orforglipron (oral) and Retatrutide (next-gen efficacy)—Lilly appears poised to maintain dominance. 

The analysts see CagriSema’s results as a positive development for Lilly, noting that the company’s ability to combine different mechanisms (e.g., GLP-1, GIP, and amylin) positions it well to offer both higher and healthier weight loss outcomes. 

They also pointed to Lilly’s focus on innovations such as a one-chamber auto-injector, which could further distinguish it from competitors.

Jefferies also underscored the potential of Orforglipron, which could emerge as a first-in-class and best-in-class oral treatment. 

With strong efficacy, good tolerability, and scalability, Orforglipron has the potential to rival injectable therapies like Wegovy, further cementing Lilly’s leadership in the field.

For Novo Nordisk, this trial outcome represents a significant setback, as it struggles to differentiate CagriSema from existing therapies in a rapidly advancing obesity treatment market. 

The company has indicated that it will be taking a second shot at optimizing weight loss through a new phase 3 trial, but as analysts at Bernstein and Jefferies agree, this may delay CagriSema’s anticipated 2026 filing and launch, leaving the door wide open for Lilly to solidify its position as the global leader in obesity treatments. 

The disappointing results are further compounded by Lilly’s expanding pipeline, with the next wave of oral and injectable therapies set to drive future growth.