Shares in Novo Nordisk fell as much as 3.5% after the release of detailed data from late-stage trials of its experimental obesity drug, CagriSema. The decline reflects growing investor unease about the drug’s competitive potential compared to Eli Lilly’s promising obesity treatment pipeline.
Although the trials showed favorable outcomes regarding blood sugar control and only mild-to-moderate side effects, the market response was muted, underscoring skepticism over whether CagriSema can challenge Lilly’s growing dominance in the weight-loss drug sector.
CagriSema’s Delays and Side Effects Boost Eli Lilly’s Competitive Edge Significantly
Analysts, including those at Jefferies, described the trial updates as “incremental,” expressing concerns about CagriSema’s tolerability. The drug caused slightly more nausea than existing treatments like Wegovy (also from Novo) and Eli Lilly’s Zepbound. This raised doubts about whether the drug offers enough differentiation. Further weighing on investor sentiment is the delayed market launch, not expected until 2027 — a timeline viewed as too slow given the rapid pace of innovation in the obesity drug space.
Novo Nordisk Stumbles on CagriSema Data as Eli Lilly Tightens Grip on Obesity Drug MarketInvestor confidence in Eli Lilly has grown, driven by encouraging data from its mid-stage trials of orforglipron, an oral weight-loss drug for diabetics, which reported no safety concerns. With late-stage data for orforglipron expected in the third quarter, the company is increasingly seen as the frontrunner in a lucrative obesity market projected to reach $150 billion by 2030. In contrast, Novo is now perceived as shifting from being the market leader to a “fast follower.”
Leadership Shake-Up Follows Disappointing CagriSema Results and Sharply Falling Share Prices
CagriSema was initially marketed by Novo as a more powerful successor to its blockbuster drug Wegovy. However, its late-stage trial results released in December 2024 showed an average weight loss of 22.7% over 68 weeks, falling short of the company’s 25% target. This underperformance contributed to a major stock sell-off, wiping out as much as $125 billion in Novo’s market capitalization and intensifying scrutiny over the company’s competitive strategy in the fast-evolving obesity treatment sector.
Amid mounting pressure, Novo Nordisk recently removed its CEO, Lars Fruergaard Jorgensen, in response to concerns about the company losing its first-mover advantage. The leadership change followed a sharp decline in the company’s share price, which had plummeted 55% since peaking in June 2024. However, the stock has rebounded modestly—up around 8%—since Jorgensen’s departure was announced in May. The leadership shake-up highlights Novo’s urgent need to realign its strategy to regain investor confidence and remain competitive in the booming obesity drug market.
