Novo Nordisk shares plunge after Alzheimer’s drug trial fails to hit key target

Shares of Novo Nordisk on Monday fell to a four-year low after the Danish drug pharmaceutical company said a highly-anticipated trial for Alzheimer’s disease failed to meet its main goal.

The trial tested whether semaglutide — the active ingredient in Novo’s blockbuster diabetes and weight loss drugs Ozempic and Wegovy — helped slow progression for Alzheimer’s disease.

While treatment with semaglutide resulted in improvement of Alzheimer’s disease-related biomarkers in two separate trials, this did not translate into a delay of disease progression, Novo said in a statement Monday. The goal had been to slow patient’s cognitive decline by at least 20%.

Novo stock was down 8.3% to 279 Danish kroner as of 12:15 a.m. GMT (7:15 a.m. ET), it’s lowest level since July 2021. Shares of Eli Lilly also fell about 1% while Biogen stock rose 5% in premarket trade.

Analysts had prior to the results called the trials a long shot, whereas Novo itself had referred it as a “lottery ticket.”

“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,” said Novo’s Chief Scientific Officer Martin Holst Lange.

Alzheimer’s disease, the most common form of dementia, is notoriously difficult to treat. It is also expected to affect an increasing proportion of people worldwide as populations grow older.

Current treatments such as Eli Lilly’s Kisunla and Biogen/Eisai’s Leqembi have shown to slow down the progression of the disease by up to a third, but come with the risk of severe side-effects.

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