Novo Nordisk's Latest Clinical Result Is Sending the Stock Plunging. Here's What Investors Need to Know.

Novo Nordisk (NYSE: NVO) is a Danish pharmaceutical company that's been around for about a century. It specializes in developing medications for metabolic diseases, such as diabetes and obesity treatment. Most of us have probably heard of their primary products, which include Ozempic and Wegovy. Both of these treatments contain an active ingredient called semaglutide, a so-called GLP-1 drug. Essentially, semaglutide mimics the natural hormone in our bodies that helps control blood sugar and reduces appetite, resulting in weight loss.

What sets Novo Nordisk apart is its focus on metabolic diseases- something it's done for over 100 years. However, the company recently released a particular clinical trial that made investors concerned.

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Novo Nordisk's latest clinical trial results

So, what exactly happened? On Nov. 24, 2025, Novo Nordisk announced results from the large clinical trials EVOKE and EVOKE+. These trials tested whether semaglutide could reduce the progression of Alzheimer's by at least 20%.

Nearly 3,800 participants enrolled in the trial over a two-year period, and unfortunately, the results didn't come out as planned. Although semaglutide improved certain disease-related markers, it didn't slow down the progression.

Specifically, the drug failed to show that it was any better than a placebo, which is essentially a sugar pill used for comparison. However, I do think it's important to note that we're only looking at preliminary results. In fact, Novo Nordisk plans to share more information at a conference on Dec. 3, 2025, with the full results to be announced at another conference in March 2026.

So, investors can hopefully get a clearer picture in the coming months.

How the market reacted

As expected, the stock market's reaction was dramatic.

Following the announcement, Novo Nordisk's stock initially crashed about 10% to a session low of $42.12 per share. That was the lowest it's been since mid-2021. That said, the stock recovered somewhat during the day, ending at $47.05 per share, which was still down about 1% overall.

That said, there's a bigger picture that investors face. It's been a challenging year for Novo Nordisk shareholders. Year-to-date, the stock is down roughly 45% and about 55% year over year.

This relatively severe market reaction is understandable, given the other developments that have been unfolding. For instance, Novo has been dealing with slowing sales growth for both Wegovy and Ozempic, mainly due to the stiff competition against Eli Lilly and Co., which develops rival drugs in the same category. To retain market share, Novo Nordisk had to cut prices for the competing products following slower sales.

Analysts had called this trial a lottery ticket, as it was a long shot that could have opened a massive total addressable market (TAM) if it worked. The rather unsatisfactory clinical result means the upside is potentially off the table.

What experts are saying

A consensus among 21 analysts who cover Novo Nordisk rates the stock a Moderate Buy, with an average score of 3.71 out of five. That rating hasn't changed over the last three months, which suggests analysts weren't expecting the Alzheimer's trial to succeed. Rather, the rating suggests that there's still value in the stock despite the near-term challenges.

Remember, the company still dominates the (growing) market for diabetes and obesity drugs, and that 55% stock decline has made the valuation much more reasonable than it has been, at least in a long time. That said, while investors can't ignore concerns about Novo Nordisk's pricing power, it's also worth noting that business remains strong. Remember, third-quarter revenue increased 11.8% to $11.74 billion-despite relatively slower sales from core products.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.