Novo's CagriSema Delivered 25% Weight Loss in Women. Could It Help Turn Around the Beaten-Down Stock?

In a development that happens far less often than they'd like, Novo Nordisk (NYSE:NVO) investors got a hit of positive news on Tuesday. The company, which shot to prominence as the developer of Wegovy and Ozempic but has lately struggled with intense competition and other challenges, announced very promising results from a Phase 3 clinical trial of a next-generation obesity drug in its pipeline.

Weight-loss treatments are a monster business, especially in this country. That's the main reason why Novo Nordisk's stock ticked higher on the news. But this is a tough market; could the new drug, if successfully developed and approved by regulators, really turn the company's fortunes around?

Image source: Getty Images.

The combination's the thing

The drug, CagriSema, gets its name from the combination of semaglutide -- the molecule in Wegovy and Ozempic -- and cagrilintide. The latter is an analog of amylin, a hormone that helps regulate appetite and control the body's metabolism.

At The Menopause Society's annual meeting on Tuesday, Novo Nordisk announced that a post hoc analysis found that in a Phase 3 trial, CagriSema demonstrated an overall mean weight loss of almost 25% for all 2,309 women participating in the study, compared to 3% for a placebo (I should note that these figures are based on an ideal where all patients regularly use the drug as directed). This was after 68 weeks of treatment.

In another analysis over the same stretch of time that was germane to the event, 1,902 women with overweight or obesity due to menopause experienced mean weight loss of between 23% and nearly 27%, depending on whether they were premenopausal, perimenopausal, or postmenopausal. Such patients, when administered a placebo, averaged 2% weight loss.

Those results either beat or are comparable to the efficacy of the two top medications currently approved by the U.S. Food and Drug Administration (FDA) to treat obesity. Novo Nordisk's Wegovy demonstrated a mean weight loss of just under 15% in its pivotal clinical trial. Zepbound, from the 300-pound gorilla of the American pharmaceutical industry, Eli Lilly (NYSE:LLY), reached nearly 21%. However, in Novo Nordisk's head-to-head Redefine 4 trial pitting CagriSema against Zepbound's molecule tirzepatide, the latter demonstrated either similar or slightly higher efficacy (it hit nearly 26% when the maximum dose was administered).

The promise of the pipeline

Investors were cautiously optimistic about the news, and I think that caution is warranted. I'd bet Novo Nordisk executives have lost plenty of sleep worrying about Eli Lilly, which became a fearsome competitor when the FDA approved Zepbound toward the end of 2023. The number of weekly prescriptions in this country for Zepbound overtook those for Wegovy at the start of 2025, and Eli Lilly's drug continues to hold a commanding lead.

With the level of efficacy CagriSema has demonstrated, it's not quite a Zepbound-killer -- it'd have to show notably higher weight-loss averages for that. It'll be competitive, sure, but I doubt that'll be enough to claw back market share for Novo Nordisk’s growing suite of weight-loss products. That rather muted investor reaction to the Phase 3 readouts is telling; they weren't good enough to convince investors that it can beat Eli Lilly. I'd agree with that view.

We should always bear in mind, though, that as a veteran pharmaceutical company, Novo Nordisk has a pipeline that includes molecules other than semaglutide (and cagrilintide, for that matter). It’s also aiming to treat conditions that aren't obesity, with investigational programs targeting cardiovascular disease, blood and endocrine disorders, liver disease, and numerous other ailments.

So, for anyone considering an investment in Novo Nordisk, I'd keep watching what many others aren't: those developmental programs. If one starts to show real promise with a drug that could be a top seller, I think the company's fortunes would materially improve. To me, CagriSema’s success alone isn't compelling enough for that to happen.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool has a disclosure policy.