Novo Nordisk shareholders are suing the drugmaker over its experimental obesity treatment CagriSema, alleging the company misled investors about a key clinical trial before releasing disappointing results that wiped billions of dollars off its market value.
A federal judge on Tuesday allowed parts of that lawsuit to move forward, finding that investors had plausibly alleged that some statements about CagriSema’s tolerability and the design of the late-stage trial may have been misleading.
CagriSema is an experimental weekly injection that combines semaglutide — the active ingredient in Wegovy and Ozempic — with cagrilintide, which mimics the hormone amylin.
When Novo released CagriSema topline results in December 2024, investors had widely expected the treatment to produce average weight loss of roughly 25%.
The company reported average weight loss of about 20.4% in practice, sending the stock sharply lower.
Shareholders argue they were not adequately informed before those results that the REDEFINE-1 study used a flexible dosing approach that allowed participants to adjust their doses during the study, rather than requiring everyone to escalate to the maximum level.
Only 57% of participants ultimately reached the highest dose.
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Investors also allege that Novo gave the impression that the Phase 3 REDEFINE-1 trial would follow a dosing approach similar to earlier trials, including a fixed maintenance dose of 2.4 milligrams of semaglutide combined with 2.4 milligrams of cagrilintide.
The distinction matters because the court noted that the extent to which patients can remain on a treatment at the intended dose, or drug tolerability, is a key issue for obesity medicines.
Judge Robert Kirsch wrote in a 56-page opinion that pharmaceutical companies cannot mischaracterize or omit important aspects of clinical trials in a misleading way.
Novo has denied wrongdoing, with a spokesperson saying the company believes that the allegations against it are meritless, and intends to vigorously defend against them.
Following the December announcement, Novo’s American depositary receipts fell $18.15 per share, or 17.83%, in a single day, with more than 53 million shares traded, according to the ruling.
Copenhagen-listed shares dropped 20.7%.
The judge rejected most of the shareholders’ allegations, finding that investors had not sufficiently shown that many of the company’s statements about CagriSema’s weight-loss potential, future trials or other issues were actionable under securities law.
However, he allowed claims related to CagriSema’s tolerability and REDEFINE-1’s clinical protocols to continue.
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The court found that investors had plausibly alleged that certain statements about the trial design could have been misleading.
It comes as Novo works to boost investor confidence in its obesity business amid mounting competition from Eli Lilly and as it bets heavily on its next generation of weight-loss treatments.
CagriSema has become so important to Novo’s future.
For people struggling with obesity, the development of effective treatments like CagriSema is a matter of significant importance, as it could potentially offer them a new option for managing their condition.
The lawsuit is separate from Novo’s case against Eli Lilly, which alleges that Lilly’s advertisements unfairly compare it.
Now the shareholder case moves into discovery, where investors will attempt to prove that Novo violated securities laws.
Novo will have the opportunity to continue defending itself before any trial on the merits.
