New punishment for Novo Nordisk. Monday that an older oral version of its drug semaglutide has failed to meet its primary goal in late-stage clinical trials testing whether the drug can slow cognitive decline in Alzheimer’s patients.
Following the announcement, the Danish company’s shares have suffered a new punishment, falling more than 12%, to 266.90 crowns, their lowest price since the summer of 2021. Since the beginning of the year, the shares have lost more than 55% of their value amid a serious crisis at Novo Nordisk, which is suffering from tough competition in the key segment of anti-obesity treatments.
The punishment of Novo Nordisk, a former European star of the financial markets, Eli Lilly, which, at the end of last week, became the first pharmaceutical company to surpass the trillion-dollar mark in market capitalization. The shares of the American pharmaceutical company soar 36% this year after rising 32% in 2024, given the growth prospects of its drugs called GLP-1, used to treat obesity and diabetes.
In relation to evidence on Alzheimer’s, Novo Nordisk has noted that patients who have taken the drug have not experienced slower progression of their disease, according to a cognitive assessment. The company has announced that it will suspend the planned extension of the studies scheduled for one year.
In this sense, the data from the reports was key for Novo, it would represent a new and important market for GLP-1 drugs such as semaglutide, after its success in the treatment of obesity and diabetes. And all in an area like Alzheimer’s patients, who have very limited treatment alternatives.
The drug being tested is Rybelsus, a tablet approved only for the treatment of type 2 diabetes. Both Rybelsus, Ozempic and Wegovy are based on the same active ingredient, semaglutide, a GLP-1 medicine. “While semaglutide did not demonstrate efficacy in slowing the progression of Alzheimer’s disease, the extensive evidence supporting it continues to provide benefits to people with type 2 diabetes, obesity and related comorbidities,” said Novo Nordisk Chief Scientific Officer Martin Holst Lange.
The Danish company is involved in a drastic restructuring, which affects both the top management and the board of directors, with the aim of getting out of the operational crisis in which it is immersed. Within its latest movements, Novo Nordisk opened a takeover war with Pfizer for control of the start-up American Metsera, which develops new anti-obesity drugs. Finally, after the presentation of different offers, Pfizer was the winner, with an agreement that valued Metsera at more than 10 billion dollars.
Different analysts have commented on Novo Nordisk’s announcement. BMO Capital Markets has noted that the trials had always been riskier, given the “limited understanding of the etiology of Alzheimer’s disease and how GLP-1 could help slow the progression. These analysts believe that Monday’s failure could cause a greater disadvantage, to which is added the failed acquisition of Metsera and the cuts in forecasts. , the pharmaceutical company announced a growth in operating profits for the whole year, in local currencies, of between 4% and 7%, compared to a previous estimate of between 4% and 10%.
Jefferies, for its part, has stated that, although hopes were not high for a positive result, the potential for a possible success maintained the interest of some investors. The firm warns that investors are “unlikely to rush back into Novo Nordisk shares.”
JP Morgan described the fall in the Novo Nordisk stock market in this Monday’s session as an over-reaction, while Bloomberg Intelligence highlighted that, although the result is discouraging, the indication of the benefit of the treatment for Alzheimer’s had been considered an “extra benefit.”
