Novo Nordisk has come up short in two phase 3 trials of semaglutide as a treatment for Alzheimer’s disease (AD). But perhaps the larger story associated with the unsurprising result is the market reaction.
Even though the effort was described two months ago by a company executive as a “lottery ticket,” because of its long-shot chance for success, Novo’s stock has taken a significant hit, falling by nearly 9% at the U.S. market open Monday. The stock recovered some ground in subsequent trading, but it was still down 6% by 11:30 a.m. EST.
Such are the outsized expectations for semaglutide, given its triumph as a diabetes and obesity mega-blockbuster—along with subsequent evidence of its ability to help patients with heart, kidney and liver disorders.
In a compilation of analyst reactions from Reuters, two called Novo’s stock drop an “overreaction,” while Simon Baker of Redburn Partners went a step further, calling it a “horribly overdone kneejerk reaction,” which “could not be justified on any fundamental basis.”
Meanwhile, Soren Lontoft Hansen, an analyst with Sydbank, credited the market reaction to “the bad sentiment around the Novo Nordisk share and the negative news flow over the past year.”
“Perhaps there was hope for a little tailwind from this study,” Hansen added.
It has been a challenging year for the Danish company, punctuated earlier this month by it losing a bidding war to Pfizer for obesity biotech Metsera.
Eli Lilly has seized leadership in the diabetes and obesity market, which Novo once dominated. After revenue increases of 36% in 2023 and 25% in 2024, Novo has seen a sequential decline in sales in the last two quarters. With a 50% drop in its market cap this year, Novo has replaced its CEO, Lars Fruergaard Jørgensen, with Maziar Mike Doustdar.
Novo’s Evoke and Evoke+ studies, which enrolled 3,808 patients between the ages of 55 to 85 with mild cognitive impairment due to AD or mild AD dementia requiring amyloid confirmation, failed to achieve their primary endpoint, which was assessed by a clinical dementia rating sum of boxes (CDR-SB) score at Week 104.
Although there was no delay in disease progression through treatment with oral semaglutide, improvements in disease-related biomarkers were evident in both trials, Novo said.
The company did not provide figures, saying it will release topline data at the Clinical Trials in Alzheimer’s Disease (CTAD) conference on Dec. 3. Novo will report full results at the Alzheimer’s and Parkinson’s Diseases Conferences (AD/PD) in Copenhagen in March of next year.
Novo added that, based on the results, it will discontinue a one-year extension study with the trials.
“Based on the significant unmet need in Alzheimer’s disease as well as a number of indicative data points, we felt we had a responsibility to explore semaglutide’s potential, despite a low likelihood of success,” Martin Holst Lange, Novo’s chief scientific officer and executive VP of R&D, said in a release.
The results amplify the “challenge of development in the AD space," William Blair analyst Myles Minter, Ph.D., wrote in a note to clients. Prior trials that cleared the way for the approvals of Eisai and Biogen’s Leqembi and Eli Lilly’s Kisunla “were foundational outcome studies, despite what has been viewed as modest effect sizes," Minter commented.
In another recent Alzheimer's disease-related development, Johnson & Johnson on Friday announced that its anti-tau antibody posdinemab failed to significantly slow clinical decline at a scheduled review in a midstage study, prompting the company to end the trial. Two years ago, the company assigned the candidate a potential peak sales forecast of $5 billion.