Novo Shares Slip After Heart Drug Misses Late-Stage Goal

A Heart Drug That Missed Its Goal

Novo Nordisk's stock took a sharp hit on Friday, sliding as much as 10%, after the company said its experimental heart drug ziltivekimab missed the main goal of a late-stage trial.

The late-stage study evaluated ziltivekimab, an IL-6 pathway blocker, to see if adding it to standard care lowered the odds of a first MACE relative to a placebo. MACE, which stands for major adverse cardiovascular event, covers cardiovascular death, non-fatal heart attack, and non-fatal stroke.

The study enrolled more than 6,300 people with elevated inflammation, chronic kidney disease, and atherosclerotic cardiovascular disease. The drug did show some biological effect.

But the reduction in risk was not strong enough to reach statistical significance. Overall adverse-event rates were similar, and overall death rates did not differ. Serious infections occurred more frequently among those taking ziltivekimab.

Novo's chief scientific officer, Martin Holst Lange, acknowledged the miss.

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"While ziltivekimab did not achieve the MACE benefit we had hoped for, this does not change our strategic commitment to cardiovascular disease," he said.

This failure adds to recent setbacks for the Danish company, which has been trying to rebuild investor confidence in its pipeline and execution, particularly in the difficult U.S. market.

A Stock Already Under Pressure

Novo's stock remains well below its level of two years ago. Shares in Copenhagen were recently down 7.4%, while U.S.-listed ADRs fell 8.6% in premarket action, putting them on course for their steepest drop since February, when the company reported disappointing head-to-head data for CagriSema, its next-generation obesity drug, against Eli Lilly's competing treatment. If the decline holds, the stock would remain in the red for the year.

Before Friday's session, Novo's Copenhagen stock was already 7% lower for the year. Eli Lilly's competing drugs have been gaining market share quickly, putting substantial pressure on Novo.

Analysts at Jefferies and Citi said the market's reaction looked excessive because ziltivekimab was expected to contribute only modestly to Novo's broader business. However, "the result is strategically negative as it removes one of Novo's more credible non-obesity growth opportunities and again reinforces the company's reliance on commercial execution in obesity and sourcing external innovation for driving growth," Jefferies said.

What Investors Are Watching Next

Friday's setback arrived even as investors had grown cautiously more positive on Novo, largely because of the Wegovy pill's U.S. debut in January. The tablet is the first GLP-1 weight-loss medicine that can be taken orally. Eli Lilly brought out its competing pill, Foundayo, in April, and it has gotten off to a slower start. Over the summer, Novo rolled out the medicine in Britain and the United Arab Emirates, aiming to repeat its U.S. success around the world.

Both Novo and Lilly argue that the oral medicine is expanding the GLP-1 category rather than taking patients away from injectables. Still, Novo faces pressure because pill prices are lower and the product remains a small share of overall revenue. Novo Nordisk's CEO has said 80% of Wegovy pill customers have never taken a GLP-1 before.

With competition intensifying, investors are paying more attention to Novo's research pipeline. The company is relying on prospects such as a higher-dose Wegovy, oral formulations of its drugs, and CagriSema to bolster its competitive position. Novo is scheduled to release its second-quarter financial results in the coming week, giving investors a fresh look at the obesity market.

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