Shares of Novo Nordisk (NVO 0.28%) are tumbling on Monday. The company's stock lost 8.9% as of 10:10 a.m. ET and was down as much as 9.2% earlier in the day. The drop comes as the S&P 500 (SNPINDEX: ^GSPC) lost 1.7%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 2.8%.
Trial results fall short
Novo Nordisk announced that its next-generation weight-loss drug CagriSema helped obese or overweight adult patients with type 2 diabetes lose 15.7% of their weight in a recent trial. That figure is well short of the 25% weight loss the company had expected.
The setback comes at a crucial time for Novo Nordisk, which had positioned CagriSema as its next-generation weight-loss treatment. The current generation, made up of blockbuster drugs like Wegovy and Ozempic, have been cash cows for Novo.
NYSE: NVO
Key Data Points
The underwhelming results weaken Novo's competitive edge, opening the field for a rival drugmaker to enter the market with a more powerful successor to the current generation.
Expanding market presence
Despite the disappointing trial results, Novo Nordisk continues to build on the success of its existing weight-loss lineup, and last week, it launched an online pharmacy called NovoCare, allowing consumers to purchase Wegovy directly at a discounted price of $499 a month.
And while CagriSema may have missed the high-water mark, it still delivered solid weight loss when compared to placebo and comes with relatively mild side effects, maintaining a "safe and well-tolerated profile," according to the company. I think Novo is still in a solid position to continue dominating the uber-lucrative weight loss drug market.
