Investing.com -- Novo Nordisk (CSE:NOVOb) has been placed on JPMorgan’s Catalyst Watch list, signaling heightened anticipation as the company approaches a pivotal moment in its development pipeline.
This placement comes ahead of the expected release of headline results from the REDEFINE 1 trial, a Phase III study evaluating the efficacy and safety of CagriSema, Novo’s experimental treatment for obesity.
The trial combines two key components: semaglutide (already marketed as Wegovy for weight management) and cagrilintide, an amylin analogue, aimed at further enhancing weight loss.
JPMorgan (NYSE:JPM) analysts have projected that REDEFINE 1 will demonstrate CagriSema’s capability to deliver an average weight reduction of 25% from baseline, measured on an intention-to-treat (ITT (NYSE:ITT)) basis.
This would mark a substantial improvement over the 14.9% weight loss observed with Wegovy in similar trials and the 20.9% achieved by Eli Lilly’s Zepbound.
If confirmed, these results would position CagriSema as a best-in-class therapy, offering a significant advancement in the treatment of obesity—a condition increasingly recognized as a major public health issue globally.
The decision to place Novo Nordisk on the Catalyst Watch list underscores a short-term bullish outlook, distinct from the firm’s longer-term “overweight” rating.
The Catalyst Watch designation flags specific near-term events that could meaningfully impact the stock’s performance. As per JPMorgan, the market has been cautious in recent months, partly due to competitive pressures from Eli Lilly’s obesity portfolio.
However, the analysts believe Novo Nordisk’s current valuation—trading at just 21 times their projected 2026 earnings—presents an attractive entry point.
With the REDEFINE 1 data expected to validate CagriSema’s superior efficacy, the stock could see a 10% uptick or more as investor confidence solidifies.
Beyond efficacy, tolerability is a crucial consideration. JPMorgan’s analysis indicates that CagriSema’s safety profile is likely to align closely with that of Wegovy and Zepbound, both of which have been well received in the market.
The most common side effects, including nausea, vomiting, and diarrhea, are expected to remain within the tolerable range documented for these existing therapies.
Importantly, drug discontinuation rates due to adverse events are projected to fall between 5-10%, consistent with Wegovy’s 6% and Zepbound’s 7% discontinuation rates in pivotal trials.
This favorable tolerability profile could further bolster CagriSema’s appeal, particularly in a market where patient adherence is critical to long-term success.
The implications of this potential breakthrough extend beyond clinical outcomes. Novo Nordisk’s dominance in the obesity and diabetes markets, already bolstered by the success of Wegovy and Ozempic, could be further strengthened if CagriSema lives up to expectations.
Obesity treatment is a rapidly expanding market, and a more effective therapy could unlock more revenue growth. JPMorgan’s projections estimate Novo’s revenue to grow at a CAGR of 12% from 2025 to 2028, well above the sector average of 7%.
This robust growth trajectory underpins the analysts’ price target of DKr1,050 by December 2026, representing a substantial upside from the current levels.
JPMorgan’s bullish stance also considers broader market dynamics. While concerns remain over competitive risks, particularly from Eli Lilly’s aggressively expanding obesity portfolio, the analysts believe Novo’s diversified pipeline and strong execution mitigate these risks.
Additionally, any unforeseen pricing pressures, particularly in the U.S., remain a key variable. However, with its innovation pipeline and proven track record, Novo Nordisk is well positioned to navigate these challenges.
Shares of Novo Nordisk were up 1.9% on Monday (NASDAQ:MNDY).