Shares of weight reduction drug maker Zealand Pharma plummeted as a lot as 23% on Monday after new information on its experimental drugs raised issues over its potential negative effects.
The Danish drugmaker mentioned that whereas its drug survodutide, which it has licensed to privately-held Boehringer Ingelheim, met its key targets in a late-stage examine, 19% of sufferers dropped out of the examine as a result of gastrointestinal occasions, in comparison with 2.9% on placebo.
“General, we view the protection/tolerability as disappointing for [Zealand], regardless of information confirming some fascinating body-composition/liver indicators,” mentioned Barclays analysts in a notice on Monday.
The excessive discontinuation fee, with greater than 40% of sufferers reporting vomiting, may restrict the drug’s industrial potential as a remedy for weight problems or these affected by fatty liver illness, the analysts added.
Shares of Zealand Pharma ended Monday’s session 22.7% decrease, firmly on the backside of the pan-European Stoxx 600 index. It provides to an almost 50% drop year-to-date.
Survodutide was examined in adults dwelling with weight problems or obese adults, with out kind 2 diabetes, over 76 weeks. Topline information introduced in April confirmed common weight lack of as much as 16.6% versus 3.2% with the placebo.
Analysts at Citi wrote in a notice on Monday: “A 19% remedy discontinuation fee as a result of… antagonistic occasions… just isn’t a rounding error, and nausea, vomiting, diarrhea, and constipation incidence on the ranges reported right here sit nicely above what we take into account commercially viable towards [rival drugs] tirzepatide and semaglutide.”
The complete survodutide information comes about three months after Zealand inventory suffered its worst day on report when a trial of one other of its experimental anti-obesity medication, petrelintide, disenchanted buyers with lower-than-expected weight reduction statistics.
Additional information on petrelintide disclosed on Friday supplied “incremental element round [its] medical profile, however little to alter our view for the reason that topline in March,” mentioned Barclays.
Petrelintide, which Zealand is creating along with Roche, seems enticing when it comes to tolerability, however efficacy doesn’t look as robust as Eli Lilly’s amylin, eloralintide, or different already out there incretin-based mostly weight problems remedies, they added.
Weight reduction drug market expands
The marketplace for weight reduction medication is at present dominated by Novo Nordisk, which sells semaglutide below the model names Wegovy and Ozempic, and Eli Lilly, which sells tirzepatide as Zepbound and Mounjaro.
However a flurry of hopeful market entrants are testing their very own anti-obesity medication, together with Zealand Pharma, which is partnering with larger drugmakers Roche and Boehringer Ingelheim, and heavyweights like Amgen and AstraZeneca.
Heightened competitors has elevated the strain on firms to distinguish their merchandise. Muscle mass preservation, oral choices, obesity-related illnesses, and weight administration are some areas firms are concentrating on to construct their share of the profitable market.
Whereas Novo’s Wegovy and Lilly’s Foundayo tablets have dominated, extra gamers are about to enter the market, Investec analyst Jimmy Muchechetere advised CNBC’s “Squawk Field Europe” on Monday.
As for Zealand Pharma, it has lengthy referred to as for an finish to what it calls the “weight reduction olympics,” and says there’s an outsized give attention to proportion weight reduction achieved.
CEO Adam Steensberg advised CNBC in March he was “extraordinarily sure” there could be a shift within the business “in the direction of tolerability,” referring to how nicely sufferers can address negative effects of the medicines.
“I believe very, very quickly, individuals begin to understand that it isn’t about that weight reduction quantity, it is about the way you obtain that weight reduction quantity.”
