Investing.com — Barclays analysts are bullish on Novo Nordisk (NYSE:) stock ahead of the December release of pivotal clinical trial data for its next-generation obesity treatment, CagriSema.
The results of the REDEFINE-1 Phase 3 trial could, according to Barclays (LON:), “redefine the obesity landscape” and provide a much-needed boost to the company’s stock, which has faced a turbulent second half of 2024.
They explained that CagriSema combines two active ingredients: cagrilintide, an amylin receptor analog, and semaglutide, a GLP-1 receptor analog. This dual mechanism of action aims to create a synergistic effect on weight loss.
Novo Nordisk has set a minimum target of 25% weight loss in the trial, which would make CagriSema the most effective weight-loss drug commercially available.
Barclays is optimistic, stating, “We believe that Novo will hit this bar of 25% weight loss.”
The Danish pharmaceutical giant’s stock has suffered a 27% decline since June, underperforming the European pharmaceutical index (SXDP) by 24%.
Factors contributing to this slump include “slight misses” in second- and third-quarter results, concerns over Wegovy’s prescription growth in the U.S., and broader sector rotation following the U.S. presidential election.
Despite these challenges, Barclays maintains confidence in Novo Nordisk’s long-term growth prospects, emphasizing that success with CagriSema could reverse the recent slide in the share price.
Barclays projects a potential 14% upside to its current net present value estimates for Novo Nordisk if the trial achieves its weight-loss target, even accounting for expected gastrointestinal side effects.
The analysts conclude, “We reiterate our Overweight rating into this critically important catalyst.”
