Novo Nordisk ( NYSE:NVO )'s new weight loss drug CagriSema missed the company's target of reducing at least 25% body weight of the Phase 3 trials' participants. CagriSema only showed an average 22.7% of weight loss to its participants but actually it's an improvement compared to previous result from its former drug Wegovy. The results dragged Novo Nordisk shares down by 20.37% at market opening on December 20, 2024.

The market saw Eli Lilly ( NYSE:LLY )'s Zepbound to be better as Zepbound's Phase 3 trials demontrated that its participants experienced weight loss at least 24% of their body weight.

Before CagriSema, Novo Nordisk already had Wegovy, which has been quite successful as a weight loss drug. Zepbound (tirzepatide) and Wegovy (semaglutide) are both GLP-1 receptor agonists, and Wegovy's participants showed only a 16.1% weight loss in the trials.

Even though Zepbound has not entered the market yet, the market sees it as a worthy competitor to Wegovy, which has been available since 2021. Novo Nordisk then introduced CagriSema that is basically an upgrade version of Wegovy.

CagriSema contains semaglutide that is used in Wegovy and combining it with cagrilintide for more efficient weight loss results, and CagriSema did show better result than Wegovy. CagriSema showed an average of 22.7% weight reduction than 16.1% of Wegovy's result.

CagriSema is essentially a better version of Wegovy, but in the trials, it still lagged behind Eli Lilly's Zepbound. Zepbound works by targeting not only GLP-1 receptor but also GIP receptor, and the strategy works, shown better efficacy compared to other GLP- 1 receptor agonists.

Zepbound has already received FDA approval since November 8, 2023 and about to release soon, the market expects Zepbound to disrupt Wegovy's sales soon after its release.

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This article first appeared on GuruFocus .