Feb 23 (Reuters) – Novo Nordisk said its next-generation obesity drug CagriSema was underperforming rivals Eli Lilly and Co. shares fell more than 16% on Monday, erasing remaining gains from its blockbuster weight loss drug Wegovy.
Novo, which had a market value of more than $650 billion in 2024, has since lost about $475 billion, with its shares back to where they were before Wegovy transformed it into Europe’s most valuable drugmaker.
Novo’s share price fell to its lowest level since Wegovy was first launched in June 2021, fueling long-term sales and share price gains and even helping to boost Denmark’s broader economy.
Novo shares were among the biggest decliners on Europe’s benchmark STOXX 600 index. Meanwhile, Eli Lilly’s shares were up about 4% in early U.S. trading.
JPMorgan analysts said the trial failure was a major setback that could dampen demand for CagriSema, dampen long-term sales hopes and make it difficult for Novo to win back share in the fast-growing obesity treatment market.
The setback adds to investor concerns about increasing competition in the obesity treatment space, where demand is increasingly driven by drugs that offer optimal weight loss results.
Shares in Novo’s Danish peer Zealand fell 7%, but analysts ignored broader concerns about its own weight-loss drug, which also targets the hormone amylin.
(Reporting by Jesus Calero in Gdansk and Bhanvi Satija in London; Editing by Milla Nissi-Prussak and Andrei Khalip)
