The bar for successful obesity drugs has been rising sharply

Nothing else explains why Novo's stock fell after a drug test result

- LISA JARVIS

In a new study, an experimental obesity drug from Novo Nordisk, CagriSema allowed people to lose more than 20% of their body weight, on average, a result that caused the Danish company's stock price to fall by as much as 29%. Yes, fall. For anyone not following the heated race for obesity drug dominance, it may look like we're living upside-down. After all, if this data were unveiled three years ago, the market reaction would have been wildly different. The stock might have gone up and headlines would have heralded an advance in the fight against obesity. But we're in a new era of obesity medicine. The bar for success, once modest, has soared—especially so for CagriSema. Let me explain.

Though Novo will make mind-blowing money from its existing obesity drugs in the coming years (its GLP-1 drugs are likely to become pharma's most lucrative franchise next year), CagriSema was seen as essential for continued growth in 2030 and beyond. And the study suggests it may not be the contender investors had hoped for.