Novo Nordisk sinks 16% after weight loss drug fails to match Eli Lilly's in trial

Novo Nordisk's stock fell over 16% Monday after it said its next-generation weight loss drug didn't meet its key goal of showing that it wasn't inferior to Eli Lilly's rival drug, in the latest blow to the Danish drugmaker, whose stock is trading at a multi-year low after a series of disappointing announcements.

The experimental drug, CagriSema, didn't achieve its primary endpoint of demonstrating non-inferiority on weight loss when compared to Eli Lilly's rival drug tirzepatide after 84 weeks, Novo said in a statement Monday morning.

Tirzepatide is the active ingredient in Lilly's mega-blockbuster medicines Mounjaro and Zepbound, which have overtaken Novo Nordisk's semaglutide, sold as Ozempic and Wegovy, in U.S. prescriptions.

Novo's Copenhagen-listed shares closed down 16.5% at 251 Danish kroner, hitting their lowest level since June 2021.

Eli Lilly's stock closed 4.9% higher. Lilly also launched a new form of Zepbound, which offers a month's worth of doses in a single pen on Monday.

Novo Nordisk ADR's are severely underperforming Eli Lilly shares.

Patients taking a 2.4 mg dose of CagriSema achieved a weight loss of 23% after 84 weeks compared to 25.5% with a 15 mg dose of tirzepatide, Novo said.

The trial was a so-called open-label trial, meaning participants knew what treatment they were receiving. Such a design can introduce a risk of bias in favor of a well-known product when it is compared to an investigational therapy, Novo's Chief Scientific Officer Martin Holst Lange told CNBC's Charlotte Reed.

There were some "slightly surprising results" for the market drug, in this case tirzepatide, he added.

Lilly's own studies have shown tirzepatide to result in a 20.2% weight loss over 72 weeks when pitted against Wegovy for people living with obesity or overweight. In a separate 2023 study, Lilly found that participants lost on average 26% over 88 weeks. The split study involved participants who knew they were taking Zepbound for the first 36 weeks, followed by a 52-week treatment period in which they were randomized to either continue on the medication or switch to a placebo.

When asked about Novo's trial results, a Lilly spokesperson highlighted Zepbound's efficacy and its pipeline, including weight loss pill orforglipronm which is expected to launch in the second quarter of this year.

Novo filed CagriSema for approval from the U.S. Food and Drug Administration late last year, and a decision is expected by late 2026. It has high hopes for the drug, which combines semaglutide and cagrilintide, another hormone released in the pancreas that affects appetite.

Despite Monday's disappointing results, Novo CEO Mike Doustdar remained upbeat about CagriSema's potential.

"We strongly believe that CagriSema has, right now, the best weight efficacy than any product currently in the market," he said.

Novo is exploring additional trials to test CagriSema, including higher-dose combinations, the company said.

"CagriSema has the potential to be the first GLP-1/amylin-combination product to reach the market for people living with obesity, documenting that cagrilintide adds to the existing benefits of semaglutide and offers clinically meaningful additive weight loss effects superior to what has been observed with GLP-1 biology alone," said Novo's Lange, adding that further trials would "assess the full weight-loss potential of CagriSema."

However, the failure of CagiSema to meet non-inferiority versus Zepbound adds further uncertainty, and the drug's commercial positioning is increasingly unclear, said Jefferies analyst Michael Leuchten.

CagriSema could account for between 15% and 25% of Novo's revenue by 2030, "highlighting the pressing need for M&A," Leuchten said, forecasting that Novo could spend up to $35 billion on M&A this year.

Monday's trial result is another blow to the Danish drugmaker as it fell short against a drug already on the market, and comes after the stock fell nearly 50% in 2025.

Earlier this month, Novo predicted that its sales and profit growth would decline by between 5% and 13% in 2026, as the company navigates competition, lower prices in the U.S., and the loss of exclusivity for Wegovy and Ozempic in certain markets.

"People should expect that it goes down before it comes back up," Novo's Doustdar told CNBC at the time.

Meanwhile, Lilly guided for sales to grow by about 25% in 2026.

Novo started the year with a strong launch of the first GLP-1 pill for weight loss in the U.S., the Wegovy pill, but Doustdar said it wasn't enough to offset challenges in other parts of its business. Eli Lilly is expected to launch a rival pill in the second quarter of 2026.

On top of competition from Lilly, Novo sales have taken a hit due to competition from compounding pharmacies that sell copycat versions of semaglutide for a lower price, in what Novo has called "illegal mass compounding that poses a significant risk to patient safety."

The FDA said earlier this month that it planned to take legal action against telehealth firm Hims & Hers, including restricting access to ingredients and referring it to the Department of Justice, after Hims offered a Wegovy pill copy for significantly cheaper than Novo sells the branded pill for. Hims quickly pulled the pill after the backlash.