Investing.com -- Shares of Novo Nordisk (NYSE:NVO) A/S, the Danish pharmaceutical company, experienced a significant drop following the release of less than anticipated results from a study of its experimental obesity drug, CagriSema. The drug was expected to aid patients in losing 25% of their weight, a figure that was not reached in the study.
Patients who consistently used CagriSema over the course of 68 weeks lost an average of 22.7% of their weight. However, when the sample was expanded to include those who discontinued the drug, the average weight loss dropped to 20.4%. Both results fell short of the anticipated 25% weight loss.
The lower than expected results led to a plunge in Novo’s shares nearly 28%. The company’s shares have now declined by 17% for the year, following a previous surge due to the success of Novo’s Wegovy weight-loss treatment. The drop in share price briefly wiped off more than $120 billion from Novo’s market value.
In contrast, shares of Eli Lilly & Co (NYSE:LLY)., a rival pharmaceutical company and maker of the competing weight-loss drug Zepbound, saw a 10% increase following the update.
The trial of CagriSema has been one of the most eagerly awaited in the pharmaceutical industry this year. Novo Nordisk had been banking on the success of CagriSema to maintain its competitive edge in the rapidly growing weight-loss market, which is forecasted to reach nearly $130 billion by 2030.
Novo’s existing blockbuster drugs mimic the gut hormone GLP-1, with CagriSema adding a second mode of action. The additional compound, cagrilintide, functions similarly to another gut hormone, amylin. Both the existing and the new drug suppress appetite, with amylin providing a more gentle experience than a GLP-1 drug, helping individuals remain satisfied for longer periods.
The study included approximately 3,400 participants and compared the effects of CagriSema to a placebo and to semaglutide, Novo’s highly successful drug sold under the brand names Wegovy and Ozempic, when used as a diabetes treatment. Individuals who took semaglutide lost an average of 16.1% of their weight in the study.
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