Financial analysts have delivered a harsh verdict on a promising new obesity treatment, slashing revenue projections by more than 80% after clinical trial data fell short of expectations.
Investment firm Barclays dramatically reduced their peak revenue estimates for Novo Nordisk’s experimental obesity medication CagriSema on Tuesday, cutting projections from $12 billion down to just $2 billion. The steep revision came one day after the Danish pharmaceutical company released underwhelming trial results for the drug.
The massive forecast reduction highlights the significant setback facing Novo Nordisk as it attempts to compete with American pharmaceutical giant Eli Lilly in the rapidly expanding obesity treatment market.
Clinical trial data released Monday revealed that CagriSema failed to match the effectiveness of Lilly’s competing drug Zepbound, which hit the market in late 2023. The results showed Zepbound delivering superior weight loss outcomes, even exceeding some of Lilly’s own previous trial data.
Stock markets reacted swiftly to the news, with Novo Nordisk shares plummeting 16% and erasing gains previously generated by their successful weight-loss medication Wegovy. Meanwhile, Eli Lilly’s stock price surged 5% higher.
Despite plans to launch CagriSema next year pending expected FDA approval by year-end, multiple investment firms including Barclays and Jefferies now express serious doubts about the drug’s commercial viability based on the latest trial outcomes.
