A pill version of Novo Nordisk A/S’s Ozempic failed to slow the progression of Alzheimer’s disease in a pair of high-risk studies that aimed to open up a new use for blockbuster obesity drugs.
Patients who took the medicine didn’t see their disease progress more slowly based on a cognitive assessment, the Danish drugmaker said Monday. Novo will discontinue a planned one-year extension of the studies. The stock plunged as much as 12.4% in Copenhagen, hitting the lowest level since July 2021.
The failure removes one of the last remaining hopes for a near-term revival for Novo under new Chief Executive Officer Mike Doustdar, even though the drugmaker had described the Alzheimer’s trials as a long-shot effort. The company is struggling to regain its footing after losing the top spot in the obesity market to Eli Lilly & Co.
“It was a lottery ticket that could have had great value,” said Per Hansen, investment economist at Nordnet AB. “Investors hadn’t assigned it any real value. Still, the hope was there.”
Being able to slow the memory-robbing disease at all could have been transformative, according to Evan Seigermann, an analyst at BMO Capital Markets. Novo’s value has more than halved this year amid investor concerns over its long-term competitiveness.
Shares of Lilly, whose rival medicines work in a similar way, also declined in trading before US exchanges opened. Biogen Inc., which has been developing different Alzheimer’s drugs, was up 6.7%.
Alzheimer’s, which brings devastating cognitive decline, memory loss and personality change, is a notoriously difficult area of drug development. The potential reward is also huge: success could have brought as much as $5 billion in extra annual revenue, according to Morgan Stanley analysts.
Novo’s drug mimics the gut hormone GLP-1 and has proven itself in a range of health problems linked to obesity, including heart attack and stroke prevention and liver disease. It may have had a better chance at preventing Alzheimer’s than treating it, analysts said.
“This is a recurring theme in Alzheimer’s disease therapeutics,” Ivan Koychev, an associate professor in neuropsychiatry at Imperial College London, said by email. “When pathology is advanced, preventing further biochemical decline is not necessarily enough to restore complex neural networks that have already deteriorated.”
Performance Culture
Academic researchers had also been hopeful Novo’s treatment would show at least a small benefit. That’s because surveys of people who’ve taken medicines like Ozempic for many years point to a lower risk of developing dementia.
The Danish drugmaker is struggling to regain its leading position in obesity. Longtime executive Doustdar vaulted into the CEO seat in August, immediately shifting into high gear with plans to cut 11% of the workforce, an unsuccesful attempt to wrest the obesity startup Metsera Inc. away from buyer Pfizer Inc. and infuse Novo with what he called a “performance culture.”
Any evidence that semaglutide — the main ingredient in Novo’s Wegovy as well as Ozempic — has an effect on the most common form of dementia could have given it a competitive advantage against Lilly’s Zepbound.
“We felt we had a responsibility to explore semaglutide’s potential,” Chief Scientific Officer Martin Holst Lange said in a statement. The treatment resulted in improvement of some physiological measures linked to Alzheimer’s, though that didn’t translate into slower worsening of the disease.
The Danish company told analysts in September that it anticipated the Alzheimer’s studies could detect as little as a low-teens percentage difference in the progression of cognitive decline. The pair of trials followed more than 3,500 people with mild Alzheimer’s disease. They had about a 75% probability of failing, Morgan Stanley analysts estimated before the results.
Adding to the disappointment, Novo didn’t even highlight any success in a small group of patients, something drugmakers often do in their analysis to help target future research.
The fact that the studies didn’t show tangible benefits and that Novo’s statement didn’t mention a silver lining for certain patients “is likely the key reason the stock is getting hit so hard,” Jared Holz, a health strategist at Mizuho, wrote in a note. “There was talk that the trial could fail in totality but still illustrate differentiation in certain patient populations.”
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