Ozempic is one of them novo nordisk‘s (NVO 2.05%) It has been a major driver of growth in recent years and has virtually become a household name. But the Denmark-based drug company has lost ground to its biggest competitor. Eli Lilly (LLY 1.46%)in the GLP-1 market.

Can Novo Nordisk turn things around and expand its market share? According to the company’s guidance, the current lineup will lead to a decline in sales this year, so it will rely primarily on next-generation treatments.

One of Novo Nordisk’s promising candidates is called CagriSema. This investigational drug has recently made even more headlines. Let’s consider whether Kagrisema’s progress is reason enough to invest in Novo Nordisk stock.

Another victory in phase 3

CagriSema is a dual agonist, mimicking the effects of two different gut hormones, GLP-1 and amylin, which help regulate blood sugar levels and satiety. In late 2024, Novo Nordisk announced that Kaglisema performed better than semaglutide (the active ingredient in the Wegovy for weight loss and Ozempic brands for diabetes) in a Phase 3 weight loss clinical trial in patients who were overweight or obese but did not have type 2 diabetes. Next-generation GLP-1 therapy resulted in an average weight loss of 22.7% after 68 weeks, compared to 16.1% for Wegovy.

The pharmaceutical giant recently shared data with CagriSema from another late-stage study pitting it against Ozempic in type 2 diabetic patients who were also overweight or obese. In this study, CagriSema reduced blood sugar levels by an average of 1.91% from baseline of 8.2%. It also led to an average weight loss of 14.2% (diabetics have a harder time losing weight). In this study, Kagrisema beat Ozempić.

What’s next for Novo Nordisk?

Novo Nordisk has already filed a regulatory application for CagriSema as a weight loss treatment. The company plans to seek regulatory approval for the diabetes drug after completing two other Phase 3 studies, including one focused on cardiovascular disease outcomes.

Despite Kaglisema’s superior performance, it will be more complex to manufacture (and more expensive) than semaglutide, which has repeatedly faced supply constraints. Additionally, CagriSema still appears to fall short of the effectiveness of Eli Lilly’s Letaltortide, which produced an outrageous average weight loss of up to 28.7% in Phase 3 trials.

It’s always difficult to compare across clinical trials, but with Zepbound currently dominating the market and promising drugs in development like letaltortide, Eli Lilly should remain the leader. Still, Kagrisema’s advantage over Wegoby and Ozempic should help Novo Nordisk improve its performance, especially as the company expands its manufacturing capacity. Additionally, Novo Nordisk is developing several promising diabetes and weight-related products, including amicletin, in both oral and subcutaneous formulations.

Finally, Wegovy has recently acquired important label expansions, including a treatment for metabolic dysfunction-associated steatohepatitis (MASH), which should contribute to sales growth. With new approvals and label expansion, the company’s earnings could start moving in the right direction again.

For all these reasons, Novo Nordisk is worth considering.