Shares of Novo Nordisk (NVO -8.70%) are tumbling on Monday. The company's stock lost 8.9% as of 10:10 a.m. ET and was down as much as 9.2% earlier in the day. The drop comes as the S&P 500 (^GSPC -1.91%) lost 1.7%, and the Nasdaq Composite (^IXIC -3.49%) lost 2.8%.
Novo Nordisk announced that its next-generation weight-loss drug CagriSema helped obese or overweight adult patients with type 2 diabetes lose 15.7% of their weight in a recent trial. That figure is well short of the 25% weight loss the company had expected.
The setback comes at a crucial time for Novo Nordisk, which had positioned CagriSema as its next-generation weight-loss treatment. The current generation, made up of blockbuster drugs like Wegovy and Ozempic, have been cash cows for Novo.
The underwhelming results weaken Novo's competitive edge, opening the field for a rival drugmaker to enter the market with a more powerful successor to the current generation.
Despite the disappointing trial results, Novo Nordisk continues to build on the success of its existing weight-loss lineup, and last week, it launched an online pharmacy called NovoCare, allowing consumers to purchase Wegovy directly at a discounted price of $499 a month.
And while CagriSema may have missed the high-water mark, it still delivered solid weight loss when compared to placebo and comes with relatively mild side effects, maintaining a "safe and well-tolerated profile," according to the company. I think Novo is still in a solid position to continue dominating the uber-lucrative weight loss drug market.
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