In a new study, an experimental obesity drug from Novo Nordisk called 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 closely following the heated race for obesity drug dominance (there must be a few of you left?), it might look like we’re living in the upside-down. After all, if these same data were unveiled just 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 quite modest, has quickly gotten extraordinarily high — especially so for CagriSema. Let me explain.

Although Novo will still make a mind-blowing amount of money from its existing obesity drugs in the coming years (its collection of GLP-1 drugs is likely to become the most lucrative franchise in the industry next year), CagriSema was seen as essential for continued growth in 2030 and beyond. And the study results suggest it might not be the contender investors had hoped for.

CagriSema is a combination of the GLP-1 agonist semaglutide, the ingredient found in Novo’s Ozempic and Wegovy, and cagrilintide, which mimics two hormones, amylin and calcitonin, that also help control feelings of satiety.

So far, we only have top-line results rather than an in-depth analysis provided by a peer-reviewed journal article. But the headline is that CagriSema allowed people to lose 20.4% of their body weight on average — better than Wegovy, but about on par with what people can already achieve with Eli Lilly’s Zepbound. And the results fell below the 25% target Novo itself had dangled before investors as the trial’s likely outcome.

Another reason investors reacted with such negativity is that the limited data suggests side effects might be hampering the drug’s full potential. The 68-week study gave participants the flexibility to control the dosage of the drug, and among those who were taking a higher dose by the end of the study, average weight loss was nearly 23%. But just 57% of participants stuck with the highest dose, leading investors to assume many took a step back to help manage common gastrointestinal side effects. (Though, to be clear, that’s still a guess — we need the full data to know for sure.) Meanwhile, people enrolled in the study who were given either semaglutide or cagrilintide alone were more likely to tolerate that higher dose.

Cagrisema is one of a wave of treatments in development that each take a different twist on mimicking naturally occurring hormones that control blood sugar and a feeling of fullness. Companies are exploring different combinations of hormones, as well as differing approaches to tuning their activity. Each study on a new combination is intensely scrutinized to try to determine the best way forward in obesity medicine.

And it’s not only about which causes the most weight loss. It’s also about controlling other health indicators, whether that’s blood sugar control or improved cholesterol levels. After Novo’s perceived stumble, stocks for companies developing alternatives, like Amgen, Viking Therapeutics and Structure Therapeutics, all saw modest gains.

Lilly has been the biggest beneficiary from Novo’s disappointment. But then, it already had the upper hand. Earlier this month, Lilly said that Zepbound handily beat Wegovy in a head-to-head trial of the two drugs, with its drug offering 20% weight loss compared with Wegovy’s 14%. And CagriSema’s strong (but seemingly not strong enough) efficacy leaves more room for Lilly’s next-generation obesity drug, retatrutide.

Moreover, earlier this week, the Food and Drug Administration said supply issues for Zepbound were finally resolved, a situation that should in theory shut down the market for the compounded version of the drug by early 2025. That could force people to shift onto either Zepbound or Wegovy.

Yet today’s stock drop also reflects a bevy of issues weighing on Novo’s future. Under the Inflation Reduction Act, Medicare is empowered to negotiate prices on certain drugs, and semaglutide is widely expected to be on its wish list for 2025 (negotiated prices wouldn’t kick in until 2027). And generics could be coming in the early 2030s, Bloomberg Intelligence noted Friday morning.

Between those two issues, “the underwhelming result will likely pressure consensus, which sees the asset driving almost 20% of Novo’s sales in 2030,” Bloomberg Intelligence analysts said following the news. That will put added scrutiny on another nascent product, amycretin, which still is only in the early stages of clinical trials, they noted.

Investors will no doubt continue to parse each scrap of data that comes out from companies developing obesity drugs to understand who will reap the most benefits from a market expected to be worth $130 billion in the next five years.

But as stock prices fluctuate, it’s important to remember who the real winners should be: the tens of millions of Americans with obesity and related chronic health problems who need and deserve affordable treatments.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, health care and the pharmaceutical industry. Previously, she was executive editor of Chemical & Engineering News.

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