Investing.com — Shares of Viking Therapeutics (NASDAQ: VKTX) rose 12% following news that Novo Nordisk’s (NYSE: NVO) obesity drug trial showed disappointing results. Shares of Novo fell as the company reported that its experimental obesity injection, CagriSema, produced less weight loss than expected, causing a significant loss of market value and benefiting industry competitors.
Eli Lilly & Co. (NYSE:NYSE:), Amgen (NASDAQ:AMGN) and Structure Therapeutics (NASDAQ:GPCR) also saw their shares climb 5%, 2.2% and 6%, respectively, as investors turned to these companies following the Novo setback. Novo’s CagriSema helped patients lose an average of 22.7% of their weight over 68 weeks, falling short of the predicted weight loss of 25%, according to data released last Friday.
Peter Welford, an analyst at Jefferies, commented on the situation, pointing out that “most investors were expecting a 25%-27% weight loss”, and suggesting that the actual results raise “tolerability concerns” for investors. patients. Welford also noted that consensus expectations for CagriSema sales are “overly optimistic.”
The negative result for Novo Nordisk had a ripple effect across the industry, with shares of smaller weight-loss drug developers and medical packaging companies in Europe falling. However, in U.S. pre-market trading, shares of obesity drug competitors, including Eli Lilly, Viking Therapeutics and others, gained ground.
Novo Nordisk’s trial results were part of the REDEFINE 1 trial, which included 3,417 randomized individuals and aimed to test the effectiveness and safety of CagriSema compared to its individual components and a placebo. Although the trial achieved its primary objective by demonstrating significant weight loss with CagriSema compared to placebo, the results did not meet the high expectations set by the company and investors.
The trial outcome has led to a reassessment of the competitive landscape in the obesity drug market, with Viking Therapeutics and others potentially benefiting from the results of Novo’s clinical trial. The market’s reaction to these developments underscores the high stakes and volatility associated with the development and commercialization of new pharmaceutical treatments.
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