Novo Nordisk lawsuit over CagriSema clears early court hurdle

The Novo Nordisk lawsuit over CagriSema is moving ahead in part after a federal judge found shareholders had plausibly alleged that some company statements about the obesity drug candidate may have misled investors. For everyday investors, the case matters because CagriSema is one of Novo’s key bets as competition in weight-loss drugs intensifies.

The ruling does not find that Novo Nordisk committed securities fraud. It means parts of the case can proceed to discovery, the stage where shareholders can seek evidence to support their claims.

A Novo Nordisk spokesperson said the company “believes that the allegations against it are meritless” and plans to defend itself vigorously.

Why are Novo Nordisk shareholders suing over CagriSema?

Shareholders allege Novo Nordisk did not give investors a clear enough picture of a late-stage trial for CagriSema before the company reported results in December 2024. CagriSema is an experimental weekly injection that combines semaglutide, the active ingredient in Wegovy and Ozempic, with cagrilintide, which mimics the hormone amylin.

Investors had broadly expected the treatment to show average weight loss of about 25%, according to the court ruling. Novo later reported average weight loss of about 20.4% in practice, and its shares sold off sharply.

The shareholder claims focus on the REDEFINE-1 study’s dosing design. According to the ruling, the trial used a flexible dosing approach that let participants adjust doses rather than requiring every patient to move up to the maximum level. Only 57% of participants reached the highest dose.

Shareholders argue Novo had left investors with the impression that the Phase 3 study would use a dosing setup similar to earlier trials, including a fixed maintenance dose of 2.4 milligrams of semaglutide plus 2.4 milligrams of cagrilintide. They say that distinction affected how investors understood the results, especially the drug’s tolerability, meaning whether patients can stay on a treatment at the intended dose.

What did the judge allow to continue?

Judge Robert Kirsch rejected most of the shareholders’ claims, including several allegations tied to CagriSema’s weight-loss potential, future studies and other company statements. But he allowed claims tied to CagriSema’s tolerability and the REDEFINE-1 clinical protocol to proceed.

The court found investors had plausibly alleged that certain descriptions of REDEFINE-1 as a fixed-dose combination, along with comments from Martin Holst Lange, Novo’s former executive vice president of development and current chief scientific officer, could have been misleading. The judge also found shareholders had sufficiently alleged the required intent for claims involving Lange.

Kirsch wrote that “clinical trials are complicated and nuanced, and investor calls are not scientific conferences,” while adding that drugmakers cannot misstate or leave out significant trial details in a misleading way.

After Novo released the December results, its American depositary receipts, U.S.-traded securities representing shares in a foreign company, fell $18.15, or 17.83%, in one day, with more than 53 million shares traded, according to the ruling. Novo’s Copenhagen-listed shares declined 20.7%.

Why CagriSema matters to Novo

Novo helped build the modern obesity drug market with Wegovy and Ozempic, but the company is under pressure from Eli Lilly’s competing medicines. That has made Novo’s pipeline more important to investors.

Novo has pointed to higher-dose Wegovy, oral versions of its medicines and CagriSema as products that could strengthen its position. The company has previously described CagriSema as a next step in obesity treatment, with the potential for greater weight loss and limited side effects.

Novo CEO Mike Doustdar told CNBC earlier this year that the market had “penalized” the CagriSema data harshly and said additional studies would give a fuller view of the drug’s potential.

The shareholder case is separate from Novo’s recent lawsuit against Eli Lilly over advertising for competing drugs. That case concerns marketing claims, while the shareholder lawsuit focuses on what Novo told investors about CagriSema’s trial design and results.

This story draws on original reporting from CNBC.