Novo Nordisk May Have Another Blockbuster on its Hands

Novo Nordisk has another shot at commercial riches.

On Friday, the Danish pharma giant released the stellar results from a phase 1/2 trial for a once-weekly jab in its pipeline that could be another blockbuster anti-obesity drug. The positive news comes just as investors were showing signs of losing their appetite for the entire industry.

Shots, Shots, Shots

The business of making people smaller may not be quite as big as initially thought. That was the consensus view of a once-banging industry entering the new year with a whimper. In December, Novo Nordisk released disappointing late-stage trial results of CagriSema, another anti-obesity drug in its pipeline, which showed the drug reduced patient weight by less than the company had projected. The bad news wiped as much as $125 billion off Novo’s market value. The competition wasn’t doing much better; to end the year, Eli Lilly reported its second straight quarter of lower than expected sales. And earlier this year, both of Novo Nordisk’s key products, Ozempic and Wegovy, were added to Medicare’s negotiation list, meaning Novo will likely be slashing US prices sometime around 2027. 

The industry may not regain its image as a growth monster, but for Novo, at least, the best may be yet to come: 

• The Novo trial showed patients using amycretin lost 22% of their body weight after 36 weeks. That’s comparable to Eli Lilly’s Zepbound and enough for Bank of America analysts to say it could be “best in class” — with the drug possibly capable of delivering 25% weight loss. 
• In addition to targeting GLP-1 hormones, the bedrock foundation for existing weight loss drugs, amycretin also targets amylin, a hormone that makes people feel full after eating.

King of the Continent: Amycretin still wouldn’t hit markets until at least 2028 — assuming positive results in later stage trials. But Friday’s results were enough to get investors excited again. Shares of the company soared more than 8% before markets closed on Friday. That’s enough for the prescription drugmaker to once again reign as Europe’s most valuable company, after briefly losing the throne to LVMH earlier this month. Keeping thin and old-world luxury goods. What could be more European?