Novo Nordisk CagriSema lawsuit advances in US court

A U.S. federal judge on Tuesday allowed parts of the Novo Nordisk CagriSema lawsuit to proceed, after shareholders alleged the drugmaker misled investors about a late-stage obesity trial. The case centers on disclosures before December 2024 results, when Novo reported average weight loss of about 20.4%, below investor expectations of roughly 25%, and its American depositary receipts fell 17.83% in one day, according to the court ruling.

The decision does not find that Novo committed securities fraud. It means certain claims have met the legal threshold to move into the next phase of litigation, where investors can seek evidence to support their allegations.

A Novo Nordisk spokesperson said the company believes the claims are meritless and plans to defend itself vigorously.

Why are Novo Nordisk shareholders suing over CagriSema?

Shareholders allege Novo did not adequately explain the design of its Phase 3 REDEFINE-1 trial before releasing the CagriSema data. CagriSema is a once-weekly experimental injection combining semaglutide, the active ingredient in Wegovy and Ozempic, with cagrilintide, a drug that mimics the hormone amylin.

The investor complaint focuses on dosing. Shareholders say the market had been led to understand that REDEFINE-1 would use a fixed maintenance dose similar to earlier studies, including 2.4 milligrams of semaglutide with 2.4 milligrams of cagrilintide. Instead, the study used flexible dosing, which allowed participants to adjust their doses during the trial rather than requiring all patients to reach the maximum level.

According to the ruling, only 57% of trial participants reached the highest dose. Investors argue that information affected how the market interpreted both the efficacy result and the drug’s tolerability at full dose.

Tolerability refers to whether patients can remain on a medicine at the intended dose without side effects or other issues forcing dose reductions or discontinuation. In obesity drugs, that can influence how trial results are read because weight-loss outcomes depend partly on how many participants can stay at the target dose.

What did the judge allow to continue?

Judge Robert Kirsch rejected most of the shareholders’ allegations, finding that many statements about CagriSema’s weight-loss potential, future trials and other matters were not sufficiently actionable under securities law.

He allowed claims tied to CagriSema’s tolerability and REDEFINE-1’s clinical protocols to continue. In a 56-page opinion, Kirsch wrote that clinical studies are complex and investor calls are not scientific conferences, while also stating that pharmaceutical companies may not misstate or omit important trial features in a way that misleads investors.

The court found investors had plausibly alleged that certain descriptions of REDEFINE-1 as involving a fixed-dose combination, along with comments by Martin Holst Lange, Novo’s former executive vice president of development and current chief scientific officer, could have been misleading. The judge also found investors had sufficiently alleged the required intent for claims involving Lange, while noting that the ruling does not determine whether those allegations are true.

The December 2024 announcement had an immediate market impact. Novo’s ADRs fell $18.15 per share, or 17.83%, with more than 53 million shares traded, according to the ruling. The company’s Copenhagen-listed shares declined 20.7%.

Why CagriSema matters to Novo

Novo built a leading position in obesity medicine through Wegovy and Ozempic, but it faces intensifying competition from Eli Lilly. That has increased investor attention on Novo’s next products, including higher-dose Wegovy, oral versions of its medicines and CagriSema.

Novo has presented CagriSema as an important part of its obesity pipeline and has previously highlighted its potential to deliver greater weight loss with limited side effects. Chief Executive Mike Doustdar told CNBC earlier this year that the market had penalized the initial data harshly and said further studies would give a fuller picture of the drug’s potential.

The shareholder case is separate from Novo’s recent lawsuit against Eli Lilly over advertising for competing obesity medicines. Lilly has denied Novo’s claims in that case, saying its advertising is based on available clinical evidence. The shareholder lawsuit concerns what Novo told its own investors about CagriSema’s trial design and results.

This story draws on original reporting from CNBC.