Novo Nordisk released results from its STEP UP trial, demonstrating the efficacy of a higher-dose of Wegovy (semaglutide 7.2 mg). The trial reported an average weight loss of 20.7% after 72 weeks among participants, exceeding the 17.5% achieved with the currently approved 2.4 mg dose and going well beyond the 2.4% reduction observed with a placebo. One-third of participants receiving the 7.2 mg dose lost at least 25% of their body weight, demonstrating the potential for significant outcomes.

While these findings bolster Novo Nordisk’s position in the competitive weight-loss market, they also underscore the challenges ahead. Eli Lilly's Zepbound has recently outperformed Wegovy in a head-to-head trial, showing comparable or greater weight reduction over 72 weeks. Analysts suggest that Zepbound may retain a market advantage, leaving questions about the broader market implications for semaglutide's higher dose.

Adding to the complexity, the U.S. Centers for Medicare and Medicaid Services has targeted semaglutide (Ozempic and Wegovy) for price negotiations under the Inflation Reduction Act, set to take effect in 2027. This puts pressure on Novo Nordisk’s stock, which saw a sharp decline following the announcement. With semaglutide products contributing over 70% of Novo Nordisk’s projected 2024 revenue, the price reductions are expected to impact its financial outlook.

Novo Nordisk remains optimistic, pointing to the STEP UP trial's results as proof of semaglutide's potential in advancing obesity treatment. However, competitive rivalry and regulatory scrutiny are also likely to have an impact.

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