Novo Nordisk slump wipes out last Wegovy-era gains after trial setback

Feb 23 (Reuters) - Novo Nordisk NOVOb.CO shares fell more than 15% on Monday, wiping away the last gains Wegovy's launch had brought, after the drugmaker said its next-generation obesity drug CagriSema underperformed Eli Lilly's LLY.N tirzepatide in a trial.

The trial was designed to show CagriSema was at least as effective as tirzepatide in reducing weight, but failed to meet that goal, the Danish group said in a statement.

Novo, which was worth more than $600 billion in 2024, has shed around $400 billion off that valuation, leaving the shares back at levels last seen before Wegovy transformed it into the world's most valuable drugmaker.

By mid-morning in Copenhagen, Novo's shares were trading at their lowest levels since June 2021, when its blockbuster weight-loss drug was first launched.

J.P. Morgan analysts said the trial miss was a significant setback that could curb demand for CagriSema, temper long-term sales hopes and leave Novo struggling to win back share in the fast-growing obesity treatment market.

"While CagriSema could offer a new treatment option to patients, the inferiority to Zepbound means it is unlikely to help Novo retake market share in obesity," they said.

The setback adds to investor worries about intensifying competition in obesity treatments, where demand is increasingly driven by drugs offering the greatest weight-loss results.

Novo Nordisk was among the worst performers on Europe's benchmark STOXX 600 index .STOXX on Monday. Shares of its Danish peer Zealand Pharma ZELA.CO also fell 6.7%.

Eli Lilly shares rose about 4% in U.S. premarket trade.