Novo-Nordisk A/S's next-generation weight-loss drug CagriSema has shown inferior efficacy compared to Eli Lilly's Zepbound in a head-to-head clinical trial. This represents another setback for the Danish pharmaceutical company's efforts to regain leadership in the obesity drug market.

The following are comments from multiple analysts:

Jefferies — Michael Leuchten: "The real concern is that Novo-Nordisk A/S's terminal valuation heavily relies on amycretin, which, like CagriSema, is a GLP-1/amylin dual-target drug (albeit a single molecule). Therefore, the failure of the REDEFINE-4 trial, combined with commercial uncertainties due to competition, makes it difficult to reassure long-term investors." "We believe investor attention may now shift to the management's merger and acquisition strategy. We predict the company could deploy up to $35 billion for acquisitions this year. Market feedback indicates investors hope these funds will target adjacent therapeutic areas beyond obesity and diabetes, which we believe could buy time for the company to refocus on its obesity pipeline."

BMO Capital Markets — Evan David Seigerman: "We see little reason for physicians to prescribe CagriSema over Eli Lilly's tirzepatide once it is approved and launched." "This outcome cannot be framed as a victory for Novo-Nordisk A/S. It is particularly striking that management has acknowledged the superiority of a competitor's product in a trial they themselves initiated and designed. We believe Novo-Nordisk A/S cannot rely solely on an oral version of Wegovy—a comprehensive and thorough strategic overhaul is necessary."

JP Morgan — Chris Schott: "These results confirm that Zepbound is currently the clear market leader, and Eli Lilly will continue to gain market share. Although CagriSema will provide Novo-Nordisk A/S with a more competitive product, we believe it will be challenging to capture market share from Eli Lilly." "Consequently, we expect Eli Lilly's Zepbound to have an extended growth window beyond 2026."

Truist Securities — Sri Krupa Devarakonda: "CagriSema remains a potent drug, and we will continue to monitor further trial data. However, the current data suggests Eli Lilly will continue to dominate the obesity market in the near term." "Eli Lilly's product offers the best efficacy, and with improvements in distribution and supply, coupled with growing demand, its position will be solidified." "While awaiting detailed data, we note that tirzepatide has a lower discontinuation rate than semaglutide. Based on available data, it is unlikely that CagriSema will demonstrate a superior safety profile compared to tirzepatide."

Bernstein — Courtney Bulin: "This trial highlights that the challenges facing Novo-Nordisk A/S persist, and Eli Lilly consistently withstands any offensive from Novo-Nordisk A/S." Bulin stated that, given production challenges and CagriSema's limited advantages over tirzepatide, they had long been skeptical about its ability to directly compete with Eli Lilly. Furthermore, Eli Lilly's more efficacious next-generation drug, retatrutide, is likely to launch around the same time, potentially further constraining Novo-Nordisk A/S's prospects.

Barclays — James Gordon: "Although we still believe CagriSema can gain approval, today's RD4 trial results indicate that its commercialization will be challenging against a competitor with better efficacy and tolerability. Novo-Nordisk A/S may have few competitive levers beyond pricing."