Novo Nordisk executives set a high bar for itself when it projected CagriSema could achieve 25% weight loss. When the GLP-1 combo didn’t hit that mark, investors reeled.
Novo Nordisk’s executives boldly declared that CagriSema was capable of achieving 25% weight loss in its Phase III trial this fall. Now, the Danish pharma’s chickens have come home to roost, with the data landing just shy of that mark—but it was enough to wipe $72 billion off its market cap in one fell swoop.
“These obesity stocks are priced to perfection. In this case, anyone wants a reason to sell, and you’re going to have an overreaction,” Evan Seigerman, managing director of biopharma equity research at BMO Capital Markets, told BioSpace.
Novo reported data from the Phase III REDEFINE 1 trial of CagriSema this morning touting “superior weight loss.” But a closer look showed that the performance fell short of Novo’s expectations and only on par with Eli Lilly’s Zepbound. Investors reeled, sending Novo’s stock down 20% to $82 Friday morning, compared to $103.44 at the previous close.
CagriSema, which combines Wegovy (semaglutide) with cagrilintide, had been expected to achieve 25% weight loss, but the REDEFINE 1 results only showed a 22.7% loss of body weight at 68 weeks.
Seigerman said Novo itself set the 25% expectation during a third quarter earnings call. Executice Vice President of Development Martin Holst Lange explained then that the number was based on models that considered earlier Phase I and II data for CagriSema and Novo’s “extensive knowledge and experience within the obesity space.” Previously, CagriSema had demonstrated 15.6% body weight reduction over 32 weeks, compared to a 5.1% reduction with Wegovy alone and an 8.1% reduction with cagrilintide alone.
Whether CagriSema achieves 22% or 25% weight loss is a pretty insignificant difference, Seigerman told BioSpace, “but when a company says this is what they’re going to hit, they put the line in the sand so they have to hit it.”
And Novo did not hit it. Several analysts agreed the achievement is similar to Eli Lilly’s Zepbound (tirzepatide), which reached between 22.5% and 20.9% weight loss at 72 weeks. CagriSema also outperformed Novo’s Wegovy in the study, which only achieved 16.1% weight loss.
This weight loss readout—and another from Amgen—was one of the most hotly anticipated data drops in the latter part of this year. Amgen’s MariTide also underperformed when data revealed last month showed weight loss of up to 20% on average at week 52. Investors had been expecting 20% to 25% weight loss.
Amgen, which also experienced a jolt to its stock price at the time, did not put a specific expectation out into the world for MariTide, although the investor community certainly did.
An interesting aspect of Novo’s trial was its flexible dosing schedule that allowed patients to modify their dosing as needed. Fewer than 6 out of 10 patients were able to reach the highest dose allowed in the study. William Blair’s analysts said this suggests “a challenging tolerability profile.”
“This is kind of an unforced error around multiple parts of trial design, setting the bar and basically creating a narrative that, now looking back, is impossible,” Seigerman said.
The titration schedule did not create consistency in the study, Seigerman continued. Because of it, Novo did not generate the data it needed to say with absolute certainty what CagriSema’s best performance could be.
Novo also did not report detailed tolerability data, leaving investors and analysts to study the number of patients who reached the top dose for clues.
“We argue that the tolerability component is the major driver for investors’ bearish take on REDEFINE 1 since the most significant unmet medical need in the obesity space is the ability to maintain patient adherence to GLP-1-based therapies,” William Blair wrote Friday morning.
But Novo’s loss is Lilly’s gain. Eli Lilly’s stock rose on the news, gaining just under 5% to $793.54 compared to $757.54 at close yesterday. Seigerman has previously called that company “the GOAT of obesity,” and today’s Novo readout further strengthens his point.
Still, William Blair sees a potential market for CagriSema among patients with type 2 diabetes and obesity. The firm is therefore looking forward to data from the Phase III REDEFINE 2 trial.
Amgen, on the other hand, is testing a once-monthly dosing schedule with MariTide, which could be a great maintenance option for patients, according to Seigerman. William Blair noted that, so far, Amgen’s data suggest MariTide has a decent tolerability profile with less severe gastrointestinal events.
One thing for sure is that investors are going to be sorting through any data released in 2025 with a fine-tooth comb, Seigerman said. “Listen, obesity is a hot market, but the obesity trade in 2025 has to be a lot more precise. There is not room for forgiveness. And I think that’s where we are today.”
