Novo Nordisk’s obesity drug candidate, cagrisema, resulted in a 23% weight loss after 84 weeks in the phase 3 Redefine 4 study, falling short of noninferiority to Eli Lilly’s tirzepatide. Shares dropped 15% on Feb. 23. Novo’s pipeline needs to produce differentiated therapies to compete in the market.

Despite cagrisema’s 22.7% weight loss at 68 weeks in the Redefine 1 study, the drug did not meet expectations compared to tirzepatide. The failure of the Redefine 4 study may impact the drug’s launch. Novo’s fair value estimate has been lowered to DKK 343 per share due to reduced cagrisema sales forecast.

Novo believes bias and dose flexibility hindered cagrisema’s results in Redefine 4. Data from Redefine 11 in the first half of 2027 may provide answers. The market may undervalue Novo’s long-term competitiveness in the GLP-1 market. Shares appear undervalued, with potential catalysts including oral semaglutide’s US launch and pipeline progress.

Read more at Morningstar: Novo Nordisk: Another Disappointing Cagrisema Trial Adds Pressure to High-Dose Strategy