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In what was being dubbed as the last major big market cap event of the year, Novo Nordisk has now disclosed the results of the phase 3 trial for its experimental weight loss drug, CagriSema, which failed to meet the market's lofty expectations.
For the benefit of those who might not be aware, Glucagon-Like Peptide-1 (GLP-1) hormone suppresses hunger by stimulating the release of insulin in the pancreas, blocking the unhelpful release of glucagon after meals to prevent excess glucose from entering the bloodstream, and slowing gastric emptying to reduce the overall intake of food.
Novo Nordisk's CagriSema drug combines Wegovy - which uses Semaglutide as the proprietary GLP-1 agonist - with Cagrilintide, a long-acting Amylin analog. Bear in mind that Amylin is a non-GLP-1 drug that works solely by increasing the feeling of satiation to reduce the overall intake of food, thereby inducing weight loss.
As per the results of its phase-2 trial, a weekly dose of CagriSema induced an average loss of around 15.6 percent of body weight at 32 weeks of uninterrupted administration. In contrast, a regimen involving Cagrilintide alone induced an average weight loss of just around 8.1 percent, with Wegovy's lone treatment faring worse after inducing a weight loss of just 5.1 percent.
This brings us to the crux of the matter. Novo Nordisk had heightened the market's expectations by noting that CagriSema's phase 3 trial would show a higher weight loss efficacy:
"When evaluating the effects of treatment if all people adhered to treatment, people treated with CagriSema achieved a superior weight loss of 22.7% after 68 weeks compared to a reduction of 11.8% with cagrilintide 2.4 mg, 16.1% with semaglutide 2.4 mg and 2.3% with placebo alone."
The press release goes on to note:
"In addition, 40.4% of patients who received CagriSema reached a weight loss of 25% or more after 68 weeks, compared to 6.0% with cagrilintide 2.4 mg, 16.2% with semaglutide 2.4 mg, and 0.9% with placebo."
A weight loss efficacy of just 22.7 percent meets Goldman Sachs' disaster scenario threshold. Accordingly, the Novo Nordisk's shares are down over 17 percent in today's pre-market trading, and remain on track for their worst showing since at least 2002.