Novo Nordisk: Shares Look Fairly Valued After CagriSema Disappointment

We continue to think the firm’s history of reliable innovation and solid pipeline in cardiometabolic diseases support a wide moat.

Karen Andersen, CFA 20 December, 2024 | 5:04PM
Facebook Twitter LinkedIn

Novo Nordisk flags

Novo Nordisk NOVO B disclosed top-line data from the phase 3 Redefine 1 study showing 20.4% placebo-adjusted weight loss for obesity drug candidate CagriSema after 68 weeks of treatment among patients who adhered to treatment.

Why it matters: Shares plunged roughly 20% on Dec. 20 as investors digested the news, which is a disappointment relative to Novo Nordisk’s expectation of 25% average weight loss.

Novo is fighting to maintain share against competitor Eli Lilly’s LLY Zepbound, which yielded a similar 20.1% placebo-adjusted weight loss at 72 weeks in the Surmount-1 study and showed superiority to Novo’s approved obesity drug Wegovy in the Surmount-5 study.

Novo’s patent protection on Wegovy (semaglutide) extends to 2032, but Medicare negotiation could begin as soon as 2027, and Novo needs innovative next-generation obesity drugs to extend its long-term growth.

Key Morningstar Metrics for Novo Nordisk

Fair Value Estimate: DKK 600.00
Morningstar Rating: ★★
Morningstar Economic Moat Rating: Wide
Morningstar Uncertainty Rating: High

The bottom line: We’re maintaining our fair value estimate of $86 per share for Novo, and we continue to think the firm’s history of reliable innovation and solid pipeline in cardiometabolic diseases support a wide moat. Following today’s decline, we think the shares look fairly valued.

The unique design of the Redefine 1 study allowed patients to lower their doses if they encountered tolerability issues, which likely drove CagriSema’s top-line efficacy numbers below Novo’s expectations.

Coming up: The balance of power between Novo and Lilly in obesity will likely continue to bounce back and forth, based on significant pipeline data from both firms expected in 2025.

For Novo, we expect phase 3 CagriSema data in patients with both obesity and Type 2 diabetes, as well as a head-to-head study against Zepbound, could help support future uptake. The promising combination drug amycretin will also have subcutaneous data and could move to pivotal studies.

For Lilly, phase 3 data for oral GLP-1 orforglipron could extend momentum, and Zepbound’s pending approval in sleep apnea could extend reach to Medicare.

Novo Nordisk Stock vs. Morningstar Fair Value Estimate

Source: Morningstar Direct.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Karen Andersen, CFA  Karen Andersen, CFA, is a senior stock analyst with Morningstar.

© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures