Novo Nordisk had one job: prove its next-generation obesity drug could go toe-to-toe with Eli Lilly’s juggernaut. It couldn’t.
Results from the Redefine 4 trial, released Monday morning, showed that Novo’s CagriSema — a combination of semaglutide and cagrilintide — produced less weight loss than Eli Lilly’s tirzepatide, sold as Zepbound for obesity and Mounjaro for Type 2 diabetes. Novo shares tanked 8.4% in premarket trading, adding to what’s been a brutal stretch for the Danish pharma giant.
This isn’t just a clinical setback. It’s a strategic one. CagriSema was supposed to be Novo’s answer to Eli Lilly’s growing dominance in weight loss. Novo’s existing drugs — Ozempic and Wegovy — helped create the GLP-1 revolution, but Eli Lilly’s tirzepatide has been steadily eating into that lead with superior efficacy data. Investors were counting on CagriSema to reclaim the crown. Instead, it confirmed what the market feared: Lilly is pulling ahead.
For Eli Lilly, this is vindication. Tirzepatide works on both GIP and GLP-1 receptors — a dual-action mechanism that’s proving exceptionally hard to beat. Novo’s combination approach tried to match that efficacy from a different angle, pairing its proven semaglutide with the amylin analogue cagrilintide. The science was sound. The results just weren’t enough.
The weight-loss drug market is projected to exceed $150 billion annually by 2030. That’s big enough for multiple winners. But head-to-head data matters enormously for insurance coverage decisions, physician prescribing habits, and investor sentiment. Being second-best in a two-horse race isn’t terminal — but it means Novo needs to find another path to differentiation, and fast.
For traders watching the fallout, the NVO dip presents an interesting question. The stock is now down more than 40% from its 2024 highs. If you believe the obesity market is big enough for both companies — and Novo’s massive existing patient base gives it staying power — the beaten-down valuation could look interesting at these levels. But if you think winner-take-most dynamics apply in pharma, Eli Lilly just strengthened its case as the cleaner play in the space.
Either way, the message from Monday’s data is clear: in the race to dominate obesity treatment, Eli Lilly is running downhill while Novo Nordisk is running into the wind.