Ozempic's failed Alzheimer's trial collapses Novo shares to lowest since 2021
The failure of a trial of a tablet version of Ozempic against Alzheimer's disease has come as a blow to Danish pharmaceutical manufacturer Novo Nordisk. The results showed no slowing of symptoms, and the company refused to extend the trial. Analysts note: it was one of the few opportunities for Novo to quickly strengthen its position amid increasing competition. The company's shares collapsed in Copenhagen by 12.4%, falling to their lowest level since July 2021.
Details
The tablet version of Novo's best-selling obesity drug Ozempic failed to slow the progression of Alzheimer's disease in two large studies, the company said. No slowing of cognitive deterioration was observed in patients taking the drug. The pharma giant announced it would not extend those studies for another year.
"We felt it was our duty to explore the potential of semaglutide (the active ingredient in Ozempic and Wegovy - OnInvest)," said Novo's research director Martin Holst Lange. He said the drug improved some physiologic measures associated with Alzheimer's disease, but it did not affect the rate of progression of the disease. The goal was to slow symptoms by at least 20 percent.
The pharma company's shares plunged 12.4% in Copenhagen, falling to their lowest level since July 2021. Novo's market value has more than halved since the beginning of 2025 amid investors' concerns about the long-term competitiveness of its drugs, the agency said.
What's next?
Although Novo itself called the trials an "unlikely endeavor," their disappointing results deprive it of one of its last hopes for a quick breakthrough, according to Bloomberg. The Danish company is trying to regain ground after losing market leadership in obesity drugs to US-based Eli Lilly. Any evidence that semaglutide affects the most common form of dementia could give Novo an edge, the agency notes. Eli Lilly's Kisunla and a joint development between Biogen and Eisai called Leqembi have shown the ability to slow the progression of Alzheimer's disease by about a third, but they are associated with a risk of serious side effects, CNBC writes.
"[For Novo] it was a lottery ticket that could have turned out to be very valuable. Investors didn't put a real value on it, but there was still hope," said Nordnet AB analyst Per Hansen.
According to Evan Siegermann of BMO Capital Markets, even a partial slowing of the symptoms of this disease could seriously change Novo's business. Alzheimer's disease, which causes severe cognitive deterioration, memory loss and personality changes, is considered one of the most difficult areas for drug development, Bloomberg writes. But the potential benefits are huge: Morgan Stanley estimates that we are talking about $5 billion in additional annual revenue.
What to do with stocks
Last week, UBS reaffirmed its neutral assessment on Novo Nordisk shares and kept its target price unchanged at DKK 315. Its target implies the securities growth by 3.3% relative to the closing level on November 21.
Most analysts, however, recommend Novo securities to buy - it has 13 such ratings out of 21. Six of them advise to keep the securities in the portfolio and two advise to sell them.
This article was AI-translated and verified by a human editor
