TLDR
- Novo Nordisk stock crashed over 10% after its Alzheimer’s drug trial failed to meet primary endpoints
- The EVOKE trials tested oral semaglutide in 3,808 early-stage Alzheimer’s patients over two years
- Executives had previously described the Alzheimer’s program as a “lottery ticket” with low success probability
- The failure adds pressure on new CEO Mike Doustdar as competition intensifies from Eli Lilly
- More than 55 million people worldwide suffer from Alzheimer’s with no cure available
Novo Nordisk stock plummeted Monday following news that its experimental Alzheimer’s treatment failed to deliver results. Shares dropped more than 10% to $42.64 in U.S. markets while Copenhagen-listed shares fell 12.19% to 267.50 Danish kroner.
The company announced that Rybelsus, its oral semaglutide pill, did not meet its primary goal in two late-stage clinical trials. The EVOKE and EVOKE+ studies enrolled 3,808 patients with early-stage Alzheimer’s disease.
Rybelsus is currently approved only for type 2 diabetes. It contains the same active ingredient found in Novo’s popular weight-loss drugs Ozempic and Wegovy.
The trials tracked patients aged 55 to 85 over a two-year period. Researchers measured changes in memory and daily functioning but failed to achieve the targeted 20% slowing of cognitive decline.
Risky Bet Doesn’t Pay Off
Novo’s leadership had tempered expectations from the start. Ludovic Helfgott, Executive Vice President for Product and Portfolio Strategy, called the trials a “lottery ticket” in September.
UBS analysts had assigned just a 10% probability of success to the program. The low odds reflected the difficulty of developing effective Alzheimer’s treatments.
Despite the skepticism, Novo felt compelled to test semaglutide’s potential. Chief Scientific Officer Martin Holst Lange cited the unmet need in Alzheimer’s care as justification for the trials.
The drug’s failure closes off a potential new revenue stream for Novo. The company was exploring whether GLP-1 medicines could expand beyond their core diabetes and obesity markets.
More than 55 million people worldwide live with Alzheimer’s disease and other dementias. No cure exists for the condition.
Mounting Pressure on Leadership
The setback arrives at a challenging time for Novo. New CEO Mike Doustdar took over in August and has been restructuring the company to compete with Eli Lilly.
Novo has implemented mass layoffs as sales growth slowed for its obesity drugs. The company’s stock price had been tumbling before Monday’s latest decline.
The pharmaceutical giant faces intensifying competition in its core treatment areas. Eli Lilly has been gaining market share in the GLP-1 space.
Recent Alzheimer’s drugs from Eli Lilly and an Eisai-Biogen partnership have shown they can slow cognitive decline. However, these treatments require infusions or injections and carry serious side effects.
Novo’s oral pill would have offered a more convenient alternative for patients. The easier administration method was seen as a potential competitive edge.
Chief Scientific Officer Lange emphasized that semaglutide remains effective for its approved uses. The drug continues to benefit patients with type 2 diabetes and obesity.
Wall Street analysts had classified the Alzheimer’s trials as high-risk, high-reward ventures. The results confirm those assessments were accurate.
The Danish drugmaker’s shares have now lost substantial value as investors reassess the company’s growth prospects without a successful Alzheimer’s program.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
