US Judge Partly Refuses to Dismiss Investor Fraud Suit Against Novo Nordisk Over CagriSema
New York: A U.S. judge said on Tuesday that Novo Nordisk must face part of a lawsuit accusing it of defrauding shareholders about a clinical trial for its weight loss and diabetes treatment CagriSema.
Novo Nordisk's American depositary receipts fell 17.8% on December 20, 2024, after the Danish drugmaker said CagriSema helped reduce weight by 20.4%, below its 25% target and what investors called the "proven" 22.5% benchmark for Eli Lilly's obesity drug Zepbound.
Investors also blamed the decline on Novo Nordisk's revelation that it changed its usual protocols by letting participants control their own CagriSema dosages, with just 57% receiving the highest dose. They said this raised concern that some people might have difficulty tolerating the treatment.
U.S. District Judge Robert Kirsch in Trenton, New Jersey, said investors sufficiently pleaded that Martin Holst Lange, then Novo Nordisk's executive vice president of development and now its chief scientific officer, intended to defraud them about CagriSema's tolerability by falsely implying that dosing protocols were the same as in previous clinical trials.
In a 56-page decision, Kirsch dismissed claims over many other alleged misstatements and omissions, including references to "fixed doses" of CagriSema.
He also said Lange's projection of "unsurpassed" weight loss of at least 25% from CagriSema was "aspirational" and no basis for a fraud claim. The judge did not rule on the merits of the investors' surviving claims.
Novo Nordisk had no immediate comment. Lawyers for the ADR investors did not immediately respond to requests for comment. Novo Nordisk's U.S. headquarters are in Plainsboro, New Jersey.
BATTLE OVER ANTI-OBESITY DRUGS
The 68-week CagriSema clinical trial covered about 3,400 adults who had body mass indexes of at least 30, or at least 27 plus at least one weight-related condition such as hypertension or cardiovascular disease.
CagriSema combined semaglutide, the active ingredient in Novo Nordisk's Wegovy, with the molecule cagrilintide, which mimics the pancreatic hormone amylin.
Investors and analysts hoped the trial, known as Redefine 1, would show Novo Nordisk had a strong pipeline of anti-obesity drugs to follow Wegovy.
That market remains highly competitive.
Novo Nordisk sued Eli Lilly on July 21, accusing it of falsely advertising Zepbound and its diabetes treatment Mounjaro by comparing higher doses of those products with lower doses of Novo Nordisk's Wegovy and Ozempic.
A federal judge in Trenton will consider Novo Nordisk's request for a preliminary injunction to halt Eli Lilly's nationwide ads at an August 27 hearing.
