Novo Nordisk shares tumbled on Monday after the company disclosed that the pill version of Ozempic, its weight-loss drug, failed to slow the progression of Alzheimer’s disease in two large studies.
The Danish drugmaker said patients receiving the treatment did not experience slower deterioration, dashing hopes for a new use of its blockbuster diabetes medicine.
In early trading in Copenhagen, Novo’s stock fell by more than 10%.
The pharmaceutical company has become one of Europe’s largest thanks to its semaglutide-based drugs—Ozempic and its weight-loss injection Wegovy. But this year its market value has dropped by more than half amid concerns that the company is losing its first-mover advantage.
Earlier studies suggested that patients with type 2 diabetes taking semaglutide-like treatments developed dementia less frequently than those receiving a placebo.
Alzheimer’s disease, which leads to memory loss, impaired speech and personality changes, remains one of the most challenging areas for drug development. The company itself had previously described the trials as a “lottery ticket.”
In Novo’s trials, which involved nearly 4 000 participants, the results “did not lead to a delay in disease progression,” although they “yielded improvements in markers associated with Alzheimer’s disease,” the company said.
Martin Holst Lange, Novo Nordisk’s chief scientific officer, said that given the “significant unmet need,” the company felt it “had an obligation to explore the potential of semaglutide despite the low chance of success.”
The Danish group is losing ground to the U.S. company Eli Lilly, which last week became the first American pharmaceutical firm to reach a $1 trillion market valuation. Eli Lilly developed tirzepatide under the brand name Mounjaro for type 2 diabetes patients and Zepbound for obesity treatment.
The two companies are competing to be the first to bring an anti-obesity pill to market. Injections designed to promote weight loss by mimicking the GLP-1 hormone have surged in popularity in recent years but remain extremely expensive.
Pill versions are easier to store, transport and prescribe, and are expected to be cheaper, potentially expanding access to treatment for millions of people as obesity rates rise worldwide.
Securing a lead and launching the first weight-loss pill is critical for Mike Doustdar, who took over as head of Novo Nordisk this summer after his predecessor, Lars Fruergaard Jorgensen, was ousted amid concerns that the company was losing ground in a key segment.
In September, Doustdar announced plans to cut 11% of the company’s global workforce—11% of its 78 400 employees worldwide—as part of a cost-reduction programme. This month, Novo lowered its sales forecast for the fourth time this year after Wegovy and Ozempic delivered weaker-than-expected results.
A separate small study presented last year at the Alzheimer’s Association International Conference indicated that liraglutide—the GLP-1 analogue used in another of Novo’s weight-loss drugs, Saxenda—may help slow the loss of brain volume in patients with Alzheimer’s disease.