- Next-generation drug falls short
- Over £70 billion wiped off market value
- Race is on for launch of oral drug
Danish diabetes and obesity drug specialist Novo Nordisk (NOVO-B:CPH) gave investors a nasty surprise on Friday (20 Dec) after revealing its next generation obesity treatment CagriSema fell short of inducing significantly more weight loss than rival Mounjaro made by Eli Lilly (LLY:NYSE), sending the shares spiraling down by more than 20%, wiping out more than £70 billion of market value.
The fall pushes the shares into negative territory for the year after surging 200% over the last five years, driven by excitement over the commercial success of the company’s leading weight-loss drug Wegovy.
Shares in Lilly surged by more than 7% in pre-market trading, taking yearly gains close to 30%.
GOOD BUT NO CIGAR
Headline results from a late-stage trial of CagriSema showed patients lost 22.7% of their body weight on average over 68 weeks, which is below the 25% loss the company was hoping for and only marginally better than Lilly’s Mounjaro which induced an average 22.5% weight loss in clinical trials.
The treatment combines the active ingredient in Wegovy, called semaglutide, with cagrilintide, another active ingredient which acts to reduce appetite and makes people feel fuller for longer.
In a statement, Novo Nordisk said: ‘The trial achieved its primary endpoint by demonstrating a statistically significant and superior weight loss at week 68 with CagriSema versus placebo.’
Novo and Lilly dominate the weight-loss market and are the only two firms to have so far successfully launched approved treatments.
Now, the race is on for next-generation treatments to raise the bar in terms of the amount of weight loss, reducing negative side-effects and tackling the thorny issue of muscle loss.
Current treatments on the market involve patients taking weekly injections and both companies are working on creating a daily oral tablet with late-stage trials due in the Autumn of 2025.
The weight loss market generated sales of $24 billion in 2023 and analysts expect it to expand to over $100 billion by the end of the decade.
