Novo Nordisk Shares Plunge as Key Drug Trial Misses Target Against Lilly

Novo Nordisk’s stock tumbled 15% Monday, reaching its lowest point since mid-2021, after the company disclosed that its experimental weight-loss drug CagriSema failed to prove it was at least as effective as Eli Lilly’s established treatment, tirzepatide. The direct comparison showed patients on CagriSema lost 23% of their body weight over 84 weeks, while those on Lilly’s drug lost 25.5%.

Novo’s Chief Scientific Officer, Martin Holst Lange, noted the trial’s ‘open-label’ design—where patients knew which drug they were taking—may have skewed results in favor of the well-known Lilly product. He expressed surprise at the high weight-loss percentage recorded for tirzepatide, which exceeded the 20.2% loss shown in Lilly’s earlier studies.

The setback injects uncertainty into the commercial future of CagriSema, a combination therapy Novo has filed for U.S. approval, with a decision expected by late 2026. CEO Mike Doustdar maintained confidence in the drug’s potential, calling it the most effective weight-loss product in development. The company plans further trials, including testing higher doses.

Analysts, however, see rising pressure on Novo. Jefferies’ Michael Leuchten suggested the drug’s unclear positioning heightens the need for major acquisitions, potentially up to $35 billion this year. The trial failure follows a nearly 50% stock decline in 2025 and a company forecast for lower sales and profit growth in 2026, driven by intense competition, U.S. pricing pressures, and looming patent expirations for its blockbusters Wegovy and Ozempic.

While Novo recently launched the first U.S. weight-loss pill, its CEO admitted this wasn't enough to counter broader challenges, including competition from compound pharmacies selling cheaper copycat versions. Eli Lilly, meanwhile, expects 2026 sales to grow about 25% and plans to launch its own rival pill soon.

Source: CNBC