High-flying healthcare stock Novo Nordisk (NVO 0.84%) lost a bit of altitude on Tuesday, following its latest news from the laboratory. A clinical trial wasn't quite as successful as hoped, and investors expressed their displeasure by trading out of the Danish company's shares. At the end of the day, the stock had lost nearly 3% of its value, comparing unfavorably to the 1% decline of the benchmark S&P 500 index.
A clinical trial fell short of expectations
Novo Nordisk is busy developing semaglutide, sold under the brand names Ozempic and Wegovy, for afflictions other than the diabetes approved for the former and obesity for the latter. On Tuesday, the pharmaceutical company reported the headline results from a phase 2 clinical trial on semaglutide's ability to halt the progression of kidney impairment and cardiovascular mortality in patients with type 2 diabetes and chronic kidney disease (CKD).
Although the study met its primary endpoint of "demonstrating a statistically significant and superior reduction in kidney disease progression as well as cardiovascular and kidney death," it did so at a 24% rate for patients administered the drug rather than a placebo.
Numerous analysts and investors were expecting a higher figure. For example, Morgan Stanley, an investment bank that tracks the stock, was anticipating at least 30%.
High potential with semaglutide
Although the results were considered disappointing, investors did not rush for the exits with Novo Nordisk. After all, it remains apparent that semaglutide has other therapeutic applications than managing diabetes or reducing excessive weight.
The company is not going to give up on investigating the molecule for such uses. In its press release on the study, the company indicated it would file for regulatory approvals of a label expansion for Ozempic in both the U.S. and the European Union this year.
