Published by Global Banking and Finance Review
Posted on February 5, 2025
By Maggie Fick and Stine Jacobsen
LONDON/COPENHAGEN (Reuters) -Novo Nordisk defended its next-generation obesity drug candidate CagriSema on Wednesday following late-stage trial data published in December that disappointed investors and wiped $125 billion from its market value.
The company remains "quite encouraged" by the data which clearly shows better weight-loss than the company's blockbuster obesity drug Wegovy, Martin Holst Lange, Novo Nordisk's executive vice president for development, said on a call with analysts.
The company's shares were up 4.2% at 1527 GMT.
The CagriSema trial, called REDEFINE-1, is crucial to Novo's drug pipeline as the company loses its first mover advantage with Wegovy and Eli Lilly emerges as a strong competitor in the biggest market for obesity drugs, the United States.
Novo plans to begin a new trial of CagriSema in the first half of 2025 which will be longer than the original 68-week study because the data suggested additional weight loss could be achieved with time, Lange said.
Analysts pressed Lange on why only 57.3% of trial participants reached the highest dose of the medicine, which has puzzled the market since the December data was released.
Investors and analysts have speculated it could be because participants suffered harsh side-effects or they achieved good weight loss on lower doses. The company said at the time side-effects were inline with other weight-loss drugs like Wegovy.
Lange refuted the notion that side-effects were a major problem for trial participants but did acknowledge that gastrointestinal side-effects were a reason that some chose to go down to a lower dose strength of the medicine during the trial.
He said that the trial's "flexible" protocol, permitting patients to change their dose rather than follow a schedule, resulted in the lowest-ever dropout rate due to gastrointestinal side-effects that Novo had ever recorded in a late-stage obesity drug trial.
This indicated that enabling patients to increase and decrease the dose strength of CagriSema in the new trial could increase the weight-loss potential of the drug, he said.
Investors and analysts were surprised to learn in December of the "flexible" protocol because the company had not previously mentioned it.
Lange's comments echoed CEO Lars Fruergaard Jorgensen's on a media call earlier on Wednesday when he said that Novo did not make a mistake in running the trial with that protocol.
The company said on Wednesday when it released quarterly results it plans to submit CagriSema for regulatory approval during the first quarter of 2026, slightly later than its previous expectation of end-2025 in order to secure supply chain readiness.
Two Novo shareholders told Reuters they were very encouraged by data shared by Lange on the call about a group of participants who lost over a quarter of their starting weight while taking a lower dose than the average for the trial.
Nicholas Anderson, portfolio manager at Thornburg Investment Management, which holds Novo shares, said "there is a subgroup of patients where the drug is exceptionally effective".
"Novo needs to figure out how to tailor this nuanced data into a compelling commercial message, but I think the market should gain confidence that CagriSema can be a blockbuster over time," he said.
(Reporting by Maggie Fick and Stine Jacobsen, Editing by Louise Heavens and Elaine Hardcastle)
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