Barclays analysts on Tuesday reduced their forecast for the potential peak sales of Novo Nordisk’s investigational obesity therapy CagriSema to $2 billion, down from a previous $12 billion estimate. The dramatic revision followed the release of late-stage clinical results a day earlier that showed CagriSema trailing Eli Lilly’s rival product Zepbound in weight-loss performance.
The updated forecast underscores how severely the new trial data impacted market expectations for Novo’s upcoming launch. According to the published results, CagriSema underperformed Lilly’s Zepbound, which entered the market in late 2023. The trial data also appeared to indicate that Zepbound’s weight-loss outcomes were stronger than some of Lilly’s earlier data had suggested.
Investors reacted swiftly. Novo Nordisk’s shares plunged 16% on the news, erasing the remaining gains delivered by its established weight-loss therapy Wegovy. By contrast, Eli Lilly’s stock rose 5% following the data release.
Novo is planning a commercial launch for CagriSema next year, contingent on anticipated approval from the U.S. Food and Drug Administration by the end of this year. But the late-stage results prompted not only Barclays but also Jefferies and several other bank analysts to question the drug’s commercial potential.
The analysts’ cuts to sales forecasts and the subsequent market moves reflect immediate investor reassessment of competitive dynamics in the rapidly changing obesity treatment market. The data have raised concerns among multiple brokerage houses about how effectively Novo can reclaim market share from Lilly, given the trial outcomes.
Key summary
- Barclays cut its peak sales forecast for CagriSema to $2 billion from $12 billion after late-stage trial results.
- Trial data showed CagriSema underperforming Eli Lilly’s Zepbound; Zepbound’s weight-loss outcomes were reported as stronger than some prior Lilly data.
- Market reaction: Novo Nordisk shares fell 16% while Eli Lilly shares rose 5%.
Sectors affected
- Pharmaceuticals and biotechnology - direct impact on commercial prospects and competitive positioning for obesity treatments.
- Equities/financial markets - notable stock price moves for the companies involved and analyst coverage adjustments.
Risks and uncertainties
- Clinical performance risk - late-stage data showed CagriSema underperformed a market rival, calling into question its clinical differentiation.
- Commercial adoption risk - analysts at multiple banks have expressed doubt about the drug’s market potential following the data, which could affect launch uptake and revenue trajectories.
- Regulatory timing uncertainty - although Novo anticipates U.S. FDA approval by the end of this year and a launch next year, the article indicates these are expectations rather than completed milestones.
Collectively, the analyst downgrades and share price moves capture a swift re-evaluation of CagriSema’s standing in a competitive obesity treatment landscape. Market participants and observers will be watching forthcoming regulatory and commercial developments closely as Novo proceeds toward its anticipated launch timeline.