Ozempic for Alzheimer's? Novo Nordisk's $9.2 billion lottery ticket

It's a gamble that could have astronomical upside and enormous risk. And we'll find out by the end of 2025 whether it pays off.

Last month, a senior executive at the company casually dropped what appears to be a bombshell during a conference in Vienna. Ludovic Helfgott, the executive vice-president for product and portfolio strategy, called the company's Alzheimer's trial a "lottery ticket"—uncertain, risky, but with astronomical upside if it pays off. By the end of 2025, we'll know if Novo Nordisk's bet will transform the company or go bust.

From weight loss wonder drug to brain medicine

Let's rewind a bit. Novo Nordisk's semaglutide (you know it as Ozempic or Wegovy) has been one of the most celebrated pharmaceutical breakthroughs of the decade. It regulates blood sugar, helps people lose weight, reduces heart attack risk, improves kidney function—the list goes on. GLP-1 agonists, as these drugs are called, have become so successful that Novo commands a 62% market share in this space, up from 60% just three years ago.

But here's the thing: while semaglutide was busy fixing metabolic disorders, scientists noticed something peculiar. They found that people taking the drug for diabetes and obesity were 40-70% less likely to develop Alzheimer's. This wasn't just anecdotal chatter—this was real-world data from medical records.

So Novo did what any ambitious pharma company would do: they decided to test if semaglutide could actually treat Alzheimer's. Not prevent it, but reverse its effects. The audacity alone is striking because most Alzheimer's drugs can only slow cognitive decline. Nobody has managed to actually reverse it.

The trial: think big or go home

Novo isn't messing around with a small, exploratory study. The company launched two massive trials called EVOKE, each involving 1,800 patients across 30 countries over three years and four months.

The timing is crucial. All participants already show amyloid buildup on brain scans—they're in the early stages of the disease. The trials should wrap up by September 2025, with data expected by year-end. That's not far away, folks.

If semaglutide works, Novo gains access to an entirely new market. The Alzheimer's therapeutics market alone is expected to grow 20-23% annually in the coming years. Even with modest efficacy, we're talking about a multi-billion-dollar revenue stream from a drug the company has already developed and optimized for other conditions. That's the pharmaceutical equivalent of seemingly hitting the lottery.

The science behind the gamble

Here's where it gets interesting. Nobody's exactly sure how semaglutide would help Alzheimer's patients, but there are plausible theories.

One leading hypothesis: the drug reduces excess sugar in the brain, which triggers inflammation. This inflammation contributes to the buildup of amyloid and tau proteins—the hallmarks of Alzheimer's. People with obesity have double the risk of Alzheimer's, and those with diabetes have triple the risk, likely because poor metabolic control damages the brain.

Another angle: semaglutide has "very strong effects on systemic inflammation," according to research at Imperial College London. It may specifically reduce brain inflammation, which many scientists believe is central to Alzheimer's progression.

A third possibility: the drug reduces stroke risk, and strokes contribute to dementia development. Or perhaps it modifies insulin levels, which play a role in tau accumulation.

The beauty of this uncertainty is that Novo only needs one mechanism to work for the drug to succeed. Multiple pathways exist.

The sceptics aren't wrong

Not everyone is convinced. Sir John Hardy, a leading molecular biologist at UCL, doesn't expect a positive outcome. He suspects that if GLP-1s do help with dementia, it's through indirect effects like reducing blood vessel damage rather than directly modifying the disease. And he's got a point—70% of Alzheimer's patients have damaged blood vessels in their brains.

Plus, there's a fundamental challenge: the trials focus on people who already have amyloid buildup. If semaglutide only prevents Alzheimer's before symptoms appear, the trial could fail even if the drug actually works. That's a crucial distinction that will require careful analysis of the results.

Investors are excited but cautioun prevails

Novo's stock has tanked 55% over the past year due to disappointing trial results for a new obesity treatment and stiff competition from Eli Lilly. The company also failed to maintain its lead in the U.S. market, where cheaper alternatives are eating into its market share.

But here's why investors are suddenly paying attention again: the risk-reward equation seems to have shifted dramatically. Even a small positive result could push the stock up 5-10% according to analysts. Novo's core diabetes and obesity business is already valued conservatively with 12.4% anticipated growth—well above the 7% needed to justify current valuations. An Alzheimer's approval? That's pure upside.

The broader picture

While Novo gambles on Alzheimer's, it's also focused on maintaining dominance in metabolic diseases. The company just ended its partnership with telehealth provider Hims, proving it doesn't need third parties to scale. An oral version of its weight loss drug is expected to be approved later in 2025, making it the first in its class.

There are risks, of course. Semaglutide's US patent expires in December 2031, though it's already expiring in markets like Canada and China. Competitor Eli Lilly's tirzepatide shows superior weight loss effects in some studies. It appears Novo can't afford to be complacent.

The bottom line

Novo Nordisk's Alzheimer's trial really is like a lottery ticket. If it wins, the company gains a transformational new market and billions in revenue. If it loses, the core diabetes and obesity business is strong enough to limit the downside.

We'll know the outcome soon. By year-end 2025, we'll discover whether this Danish pharmaceutical giant's boldest bet will revolutionize Alzheimer's treatment or become a cautionary tale about reaching too far. Either way, it's one of the most consequential pharmaceutical trials happening right now.

The house may or may not hold all the cards, but Novo is about to place one hell of a bet.

Vested Finance is India’s global investing specialist, regulated in the US through its licensed brokerage arm.

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