Investing.com -- Shares of Viking Therapeutics (NASDAQ: NASDAQ:VKTX) soared 12% following the announcement that Novo Nordisk's (NYSE: NYSE:NVO) obesity drug trial yielded disappointing results. Novo's shares plummeted as the company reported that its experimental obesity shot, CagriSema, resulted in less weight loss than anticipated, causing a significant market value loss and benefiting competitors in the sector.
Eli Lilly & Co. (NYSE: NYSE:LLY), Amgen (NASDAQ: NASDAQ:AMGN), and Structure Therapeutics (NASDAQ: GPCR) also saw their stocks climb by 5%, 2.2%, and 6%, respectively, as investors shifted their focus to these companies following Novo's setback. Novo's CagriSema helped patients lose an average of 22.7% of their weight over 68 weeks, falling short of the predicted 25% weight loss, according to data released last Friday.
Jefferies analyst Peter Welford commented on the situation, highlighting that "most investors had expected weight loss of 25%-27%," and suggesting that the actual results raise "tolerability concerns" for patients. Welford also noted that the consensus expectations for CagriSema sales are "overly optimistic."
The negative outcome for Novo Nordisk has had a ripple effect across the industry, with shares of smaller weight-loss drug developers and medical packaging companies in Europe experiencing declines. However, in US premarket trading, shares of obesity-drug rivals, including Eli Lilly, Viking Therapeutics, and others, have gained traction.
Novo Nordisk's trial results were part of the REDEFINE 1 trial, which included 3,417 randomised individuals and aimed to test the efficacy and safety of CagriSema compared to its individual components and a placebo. While the trial met its primary endpoint by demonstrating significant weight loss with CagriSema versus placebo, the results did not meet the high expectations set by the company and investors.
The trial's outcome has led to a reassessment of the competitive landscape in the obesity drug market, with Viking Therapeutics and others potentially standing to benefit from Novo's clinical trial results. The market's reaction to these developments underscores the high stakes and volatility associated with the development and commercialization of new pharmaceutical treatments.
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