Weight loss drug maker stock sinks 25% as safety data spooks investors
Shares in weight-loss drug maker Zealand Pharma fell as much as 26 percent on Monday after new data on its experimental drug raised concerns about potential side effects.
Danish pharmaceutical manufacturer survodutide achieved its main objectives in a late-stage study19% of patients discontinued the study due to gastrointestinal events; this rate was 2.9% due to gastrointestinal events. placebo
“Safety/tolerability remains the key issue,” Barclays analysts said in a note on Monday.
The high discontinuation rate, with more than 40 percent of patients reporting vomiting, could limit the drug’s commercial potential as a treatment for those suffering from obesity or fatty liver disease, analysts added.
Zealand Pharma’s shares were last at the bottom of the pan-European index, down 24%. Stoxx 600 index. This contributes to a year-to-date decline of almost 50%.
Survodutide was tested for 76 weeks in adults living with obesity or overweight adults who did not have type 2 diabetes. Data released in April showed that average weight loss was up to 16.6% compared to 3.2% with placebo.
“The discontinuation rate of 19% … due to adverse events is not a rounding error, and the incidence of nausea, vomiting, diarrhea, and constipation at the levels reported here are well above what we consider to be commercially feasible,” analysts at Citi wrote in a note Monday. [rival drugs] tirzepatide and semaglutide.”
The full Survodutide data comes nearly three months after Zealand shares suffered their worst day on record when a trial of another experimental anti-obesity drug, petrelintide, disappointed investors with lower-than-expected weight-loss statistics.
More data on petrelintide released Friday,” [its] Barclays said “the clinical profile, however, has little to change our view since the peak in March.”
They added that Petrelintide, which Zealand developed with Roche, appeared attractive in terms of tolerability, but its effectiveness did not appear to be as strong as Eli Lilly’s amylin, eloralintide, or other currently available incretin-based obesity treatments.
The market for weight loss drugs is currently dominated by Novo Nordisksells semaglutide under the brand names Wegovy and Ozempic, and Eli LillyIt sells Tirzepatid as Zepbound and Mounjaro.
But hopeful new entrants are testing their own anti-obesity drugs, including Zealand Pharma, which has partnered with larger drugmakers. Roche and Boehringer Ingelheim and the heavyweights amgen And AstraZeneca.
Increasing competition has increased the pressure on companies to differentiate their products. Muscle mass preservation, oral options, obesity-related diseases and weight management are some of the areas where companies are aiming to capture a share of the lucrative market.
As for Zealand Pharma, the company has long called for an end to what it calls the “weight loss Olympics”, saying there is an excessive focus on the percentage of weight loss achieved.
CEO Adam Steensberg told CNBC in March that he was “extremely confident” there would be a shift “towards tolerability” in the industry, citing how well patients can cope with the drugs’ side effects.
“I think very, very soon people are starting to realize that it’s not about the weight loss number, it’s about how you get to that weight loss number.”
