Novo's new obesity drug, Wegovy in race to becoming top selling franchise

Novo Nordisk A/S’s appetite-blocking shot semaglutide, sold under the brand names Ozempic and Wegovy, will probably become the world’s top-selling drug franchise next year. It broke open a market that could reach $130 billion by 2030 and has a cultural reach broader than any new drug since Viagra. Yet to keep its lead in the red-hot field of obesity, Novo must prove by December that it has something even better. 

The Danish drugmaker’s arch-rival Eli Lilly & Co. has introduced another shot — Zepbound, also known as Mounjaro —  that so far has shown even more weight loss than Wegovy. A pack of other companies are hot on both their heels with next-generation drugs, including shots that could be more effective and simple pills that could be easier to take. And semaglutide is facing US price negotiations as soon as next year and European patent expiry by 2031. In China, where the compound will lose patent protection in 2026, potential generic challengers are already lining up to enter the market. 

 

To stay ahead, Novo is turning to a compound called cagrilintide. Together with semaglutide, which slows the movement of food through the digestive system by mimicking a hormone called GLP-1, cagrilintide forms a hybrid the company calls CagriSema. Novo is betting the duo will be greater than the sum of its parts, predicting it will help patients lose at least 25% of their body weight. That would make it the most effective treatment yet, in terms of pounds lost in a large clinical trial — potentially without causing more side effects than Wegovy alone. 

 

The company’s scientists have even suggested the combo may help forestall one of the biggest problems of obesity drugs, the yo-yo effect of patients regaining their lost weight as soon as they come off the drug. Novo is also exploring CagriSema’s efficacy as a treatment for type 2 diabetes.

 

The key to the new combination is a second gut hormone, amylin, that’s targeted by cagrilintide. Novo’s development chief Martin Holst Lange referred to amylin as “my secret love” in a call with analysts in March.

 

“Without giving 100% guarantees, I’m quite confident that this will read out in a very nice way,” he said in an interview a day later.

 

It’s a tantalizing prospect, and one that could usher in a whole new class of weight-loss treatments. CagriSema is first in line among a host of drug development projects that rely on amylin; other companies with similar drugs in the works, including Zealand Pharma A/S and Eli Lilly, will be watching its progress carefully. 

 

Novo Gains Fueled by Ozempic and Wegovy Fade | The drugmaker's shares have fallen about 25% since June

Yet with Novo’s earnings just around the corner on Nov. 6, some investors have become more skittish. The shares have dropped about 25% since their June peak, hurt by lower-than-expected prescription numbers for Wegovy and concerns about potential downside from a large study of CagriSema that’s due to read out in December. Because most investors expect success and the results are crucial, a win may boost the company’s value by only a few percent, UBS Group AG analyst Jo Walton warned in early October. Failure to surpass the existing competition and side effects much worse than Wegovy could mean a 10% wipeout, she said.

 

Novo declined interview requests, citing its quiet period ahead of the third-quarter results. 

 

Under Pressure

If CagriSema meets Novo’s self-set 25% weight-loss bar, it will give the Danish company a leg-up in a crucial aspect of the obesity market. Eli Lilly’s Zepbound — branded as Mounjaro in Europe for obesity, as well as in the US for diabetes — showed weight loss of about 21% at the highest dose, while Novo’s Wegovy showed weight loss of about 15%.

 

Zepbound, also known as Mounjaro, has shown even more weight loss than Wegovy so far. Photographer: Shelby Knowles/Bloomberg

“Novo is under pressure to stay relevant” as the field is increasingly dominated by drugs that mimic more than one gut hormone, said Matthias Tschöp, chief executive officer of the research institute Helmholtz Munich. Tschöp is one of the scientists who laid the groundwork for so-called multi-receptor therapies, which include Eli Lilly’s Zepbound. “CagriSema may offer that potential,” he said.

 

Wegovy mimics GLP-1, which the body naturally produces after eating. Zepbound  also targets GLP-1 but adds a second hormone called GIP as well. Tschöp said patients on this kind of dual-action compound generally can lose more weight than those taking GLP-1 alone, with comparable side effects. A head-to-head trial of Zepbound and Wegovy that’s expected to deliver results by the end of the year may show that for sure.

 

Eli Lilly is already going a step further with a triple combination drug, retatrutide, that adds a third hormone, glucagon, into the mix. In a retatrutide study with 338 people last year, patients lost up to about 24% of their weight at higher doses. The US drugmaker declined to comment. 

 

If Wegovy and Zepbound can already help patients lose so much weight, some might question why even more is necessary. But individual patients’ experiences can vary. People with diabetes will probably lose less weight on Wegovy, Tschöp said, and for patients with the highest body mass indexes, losing 15% to 20% of their weight would still mean living with obesity. 

 

Meanwhile, numbers on the scale aren’t the only factor at play. GLP-1-based drugs have a well-documented record of causing nausea, vomiting, diarrhea and other unpleasant gastro-intestinal side effects. Drugmakers are keen to offer an alternative that’s easier to handle and might also cause fewer complications such as muscle loss and weight regain.

 

That’s where CagriSema’s results this year could have even broader implications. 

 

Growing Interest

After GLP-1, GIP and glucagon, amylin is the next-biggest target being explored for weight loss, said Henrik Sillesen, chief medical officer of health analytics company Airfinity Ltd. Positive results “will solidify amylin as a viable anti-obesity therapeutic target,” he said. 

 

Zealand CEO Adam Steensberg describes taking amylin as a gentler experience than a GLP-1 drug. Where a GLP-1 drug might remove a person’s desire to eat, amylin helps them stay satisfied for longer, he said in a conversation earlier this year. 

 

“Our base case is absolutely that the data will come out positively for Novo,” he said last month. “One thing that will be particularly interesting to see is whether Novo presents data on muscle preservation, which we’ve only seen pre-clinical data points on until now.” 

 

Scientists first showed the ability of amylin to reduce eating in 1991, said Thomas Lutz, a University of Zurich professor who has long conducted research on the hormone in mice and rats. “To put it in simple terms, when we eat a meal we feel satiated and happy, and when we eat a very large meal we may also feel unwell,” Lutz said. “The question is, are these really the same mechanisms that are just overstimulated after a big meal, or are you activating different mechanisms?”

 

Research so far suggests that they may affect different mechanisms — and that amylin and GLP-1 may work on different primary targets in the brain, he said. That could mean amylin has less of a nausea-inducing effect.

 

The first amylin drug was introduced to the market some 20 years ago. But it was complicated to take and failed to gain much traction. In the academic world, amylin has long played second fiddle to GLP-1, Lutz said. 

 

Now, interest is growing.

 

“It’s almost like amylin combined with anything could have a one plus one equals three potential,” said Emily Field, a Barclays Plc analyst, in September after seeing new research on the compound presented at a diabetes conference in Madrid. “It seems pretty exciting.” Assuming the trials are successful, she expects CagriSema to reach the market some time in 2026.

 

At the conference, Novo suggested the amylin combination could also lead to more durable weight loss, a holy grail in the field. When given to rats, CagriSema counteracted the metabolic slowdown that usually comes alongside calorie restriction. That could increase the likelihood of long-lasting weight loss, the company’s scientists said. 

 

Manufacturing Hurdles

Still, what works in rats doesn’t always have the same effect in people. And even if CagriSema is successful, Novo will face another significant hurdle: manufacturing. The Danish drugmaker has already struggled to meet the world’s appetite for Wegovy and Ozempic, the diabetes shot that’s often taken off-label for weight loss. As of last week, Wegovy is no longer in shortage in the US. Some doses remain temporarily unavailable in Denmark.

 

“On a global level, we are faced with higher-than-expected demand across most of our portfolio,” said a spokesperson for Novo. “​We are investing significantly in expanding capacity across all relevant production facilities.”

 

CagriSema will be more complicated to produce than either of Novo’s current blockbusters. Not only does it require two different drug ingredients, Novo also had to design a new type of pen for patients to use to take it, with a unique dual-chamber system. That’s because semaglutide and cagrilintide need to remain separate until they’re injected. Novo is exploring a version of CagriSema that would allow its two drug ingredients to be mixed together in one syringe, though Chief Financial Officer Karsten Munk Knudsen told investors in August that project is “not without risk.”

 

The dual-chamber syringe is “extraordinarily complex,” Jefferies analyst Peter Welford said in a note in September after hosting a panel on manufacturing with a former Novo site chief. Such a device hasn’t been made commercially at scale before, he wrote, and Novo may not be able to produce the dual-chamber injectors as quickly as its simpler vials.

 

In a ferocious market with an ever-evolving list of challengers, CagriSema faces multiple stumbling blocks. Hitting any of them could cost Novo its lead.

 

But given the hammering the company’s shares have taken in recent months, the risk-reward is starting to look better, Goldman Sachs analyst James Quigley wrote last month. Even if CagriSema fails, promising early results this year from an experimental drug that combines GLP-1 and amylin into one pill show that Novo could have more than one shot on goal, he said.

 

“Next year, the focus will shift to orals,” said Gareth Powell, head of health care at Polar Capital. His team has £3.6 billion ($4.7 billion) under management and holds stakes in Zealand, Novo, Eli Lilly and Amgen Inc. — which is developing its own anti-obesity shot — across different portfolios. After the CagriSema study, Powell said investors’ focus will switch to data coming next year from an obesity pill being developed by Eli Lilly. Novo’s pill options are more limited after one early-stage pill disappointed analysts this fall. The amylin-plus-GLP-1 compound that’s similar to CagriSema will require huge amounts of drug ingredient to produce and might be less attractive for that reason, Powell said. 

 

But it does show that even if CagriSema falls short, Novo still has options. 

 

“They’re really smart,” Powell said. “People are down on the company. But they’ve got an incredible track record.”