Novo Nordisk shares tumble after drug trial falls short
Shares in Danish drug giant Novo Nordisk have shed more than a sixth of their value after poor drug trial results sparked an investor selloff.
The firm behind weight-loss drugs Ozempic and Wegovy saw its shares tumble by 16.7 per cent to 257.23 Danish Krone on Monday morning after trials of its new obesity shot, CargriSema, fell short of its competitor.
Other major pharma companies saw significant stock falls on the back of the news, including AstraZeneca (down 0.5 per cent), Johnson & Johnson (down 0.4 per cent) and Pfizer (down 0.8 per cent).
Novo Nordisk kickstarted the weight-loss boom and was once Europe’s most valuable company but it has struggled to keep up with the rapid growth of its competitors, including US-based Eli Lilly.
People treated with a standard dose of the new drug saw 20.2 per cent weight loss after 84 weeks, lower than the 23.6 per cent achieved by Lilly’s trizepatide, Novo said on Monday.
These disappointing results spooked investors, delivering the latest chapter in a recent history of share price falls for the Danish firm.
Per Hansen, an investment economist at Nordnet, said Novo’s downturn was creating a “spillover” effect which saw foreign investors collectively pull out of Danish companies.
Novo Nordisk: competition is ‘good’
The firm announced 9,000 job cuts in September, followed by the exit of its chairman and six board members in October.
Sebnem Avsar Tuna, Novo Nordisk’s UK general manager, spoke to Morning Wire last week, insisting that competition in the weight-loss sector “is good” for the Danish firm.
Tuna called for the NHS to keep its clawback charge low and predictable, by which pharma companies must pay back a percentage of profits from the sale of medicines over an agreed amount.
The clawback was the subject of a heated row in the UK last year, in which health secretary Wes Streeting threatened to walk away from negotiations with medical firms.