Shares of Novo Nordisk (NVO) are down 10% and at their lowest level in four years after the pharmaceutical company said a clinical trial for an Alzheimer’s drug failed to meet expectations.
The trial tested whether semaglutide, the active ingredient in Novo Nordisk’s diabetes and weight loss drugs Ozempic and Wegovy, helped slow the progression of Alzheimer’s disease.
While treatment with semaglutide resulted in improvement of Alzheimer’s disease-related biomarkers, it did not translate into a delay of disease progression, Novo Nordisk said.
The goal of the trial had been to slow a patient’s cognitive decline by at least 20%. Novo Nordisk’s stock is now trading at its lowest level since July 2021.
In contrast, the stock of Eli Lilly (LLY), the Danish company’s main rival in weight-loss drugs, is trading at an all-time high, having achieved a $1 trillion U.S. market capitalization on Nov. 21.
Novo Nordisk had been upfront about the Alzheimer’s disease trial, acknowledging that it was a long shot and referring to it as a “lottery ticket.”
Still, the disappointing trial results are enough to pressure NVO stock and send it down substantially.
Alzheimer’s disease, the most common form of dementia, is notoriously difficult to treat. It is expected to become a bigger problem in coming years as an increasing number of people age.
Current treatments such as Eli Lilly’s Kisunla have shown some progress in slowing Alzheimer’s progression. But they come with the risk of severe side-effects.
Prior to today, NVO stock had declined 46% this year to trade at $47.63 U.S. per share.
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