On the 23rd (local time), Novo Nordisk failed to demonstrate non-inferiority for its next-generation obesity treatment "Cagrisema" against Eli Lilly and Company's tirzepatide (active ingredient in "Mounjaro" and "zepbound") in a phase 3 trial. The share price plunged more than 16% intraday. The market even called it "the worst-case scenario." Analysts said the battle for supremacy in obesity treatments has effectively ended.
◇ 23% vs. 25.5%… unable to clear Lilly's "tirzepatide" wall
Novo released the results of the phase 3 "REDEFINE 4" trial in patients with obesity the same day. Cagrisema failed to meet non-inferiority to tirzepatide in weight-loss efficacy. Non-inferiority is a primary endpoint achieved when a drug shows effects equal to or greater than a comparator.
The open-label trial enrolled 809 patients with obesity and at least one comorbidity. The average baseline weight was 114.2 kilograms. Participants received each drug as a once-weekly subcutaneous injection.
Among patients who completed 84 weeks of treatment, the weight-loss rate was 23% for Cagrisema and 25.5% for tirzepatide. On a full analysis set including dropouts, the rates were 20.2% and 23.6%, respectively. The difference was statistically significant.
Tirzepatide is sold in the United States as "Mounjaro" and "zepbound." They target type 2 diabetes and obesity, respectively. It has already overtaken Novo's semaglutide (active ingredient in "Wegovy" and "Ozempic") franchise in U.S. prescription volume.
Cagrisema is a fixed-dose, once-weekly combination of semaglutide and the amylin analog cagrilintide. With dual GLP-1 and amylin mechanisms, the strategy was to boost weight loss over semaglutide alone. In this trial, a fixed dose of cagrilintide 2.4 mg and semaglutide 2.4 mg was used, while tirzepatide was dosed at 15 mg.
◇ Plunged 16% intraday… "Giving back gains since the 2021 'Wegovy launch'"
The market reaction was immediate. Novo shares fell to their lowest level since June 2021 during trading. Its market capitalization is estimated to have shed more than $400 billion (about 560 trillion won) from the 2024 peak. Reuters said it "wiped out the gains that once sent Novo to the top of Europe's market-cap rankings after the 2021 launch of Wegovy."
Marcus Manns of Union Investment said, "This is the worst-case scenario, proving that Mounjaro is clinically superior to Cagrisema," adding, "The base case was that the two drugs were similar, and the optimistic view was Cagrisema's superiority, but few discussed the possibility it would be inferior." He added, "Novo is now in for a tough fight."
Per Hansen, an investment strategist at Sweden's Nordnet Bank, said, "The difference between 23% and 25.5% may look small, but for investors it is a very material gap," assessing that "in a winner-takes-all structure, Lilly has cemented the momentum."
Concerns about long-term growth also emerged. Henrik Hallengreen Lauridsen, an analyst at Denmark's Jyske Bank, said, "The market has expected about 60% of Novo's future growth to come from Cagrisema," calling it "a significant blow."
Jefferies analyst Michael Leuchten also said, "If there is no clear superiority over existing high-dose GLP-1s, it is hard to justify a premium strategy."
He said, "Cagrisema is a core pipeline with the potential to account for 15%–25% of Novo's total revenue by 2030," adding, "These results further underscore the need for mergers and acquisitions (M&A)." He continued, "Novo could pursue up to $35 billion (about 49 trillion won) in M&A this year."
Novo has already submitted Cagrisema to the U.S. Food and Drug Administration (FDA). A decision on approval is expected by the end of the year. The application was based on earlier "REDEFINE 1" results. In that study, patients who continued treatment for 68 weeks saw about 23% weight loss, or about 20% including dropouts.
On a conference call with analysts that day, company executives said the results may have been influenced by the open-label design. Because participants knew which drug they were receiving, bias could have crept in when comparing a widely known medicine with one in development, they noted.
Executives stressed that if Cagrisema launches next year, "the potential to secure the best weight-loss label remains intact." Chief Executive Mike Doustdar said, "Drugs ultimately sell based on the label," adding, "Our label is based on prior trials, not this study."
They also addressed tirzepatide's weight-loss rate in the 25% range, saying, "That figure is not listed on the competitor's label, and it has not been commonly observed in our own trials, other studies, or real-world prescribing data," arguing, "Given real-world data, there is room to view it as an outlier."
◇ The "high-dose trial" card remains… but strategy changes are inevitable
Chief Scientific Officer Martin Holst Lange said that while "we are satisfied with the 23% reduction itself," he emphasized expectations for a phase 3 high-dose Cagrisema trial starting in the second half, including semaglutide 7.2 mg.
He said, "Depending on additional data, we will not rule out another head-to-head (direct comparison) trial with Lilly."
Conditions are not favorable. Novo expects its sales and profit growth rate to slow by 5%–13% this year. The factors are U.S. drug price pressure, intensifying competition, and patent expirations for Wegovy and Ozempic.
Above all, Cagrisema has been cited as the next-generation growth driver to shoulder the so-called "patent cliff." With the REDEFINE 4 results, the view is gaining traction that a wholesale reassessment of the growth strategy is unavoidable.