Shares of weight reduction drug maker Zealand Pharma plummeted as a lot as 26% on Monday after new information on its experimental drugs raised issues over its potential unwanted side effects.
The Danish drugmaker mentioned that whereas its drug survodutide met its key targets in a late-stage study, 19% of sufferers dropped out of the research as a result of gastrointestinal occasions, in comparison with 2.9% on placebo.
“Security/tolerability stays the important thing challenge,” mentioned Barclays analysts in a observe on Monday.
The excessive discontinuation charge, with greater than 40% of sufferers reporting vomiting, would possibly 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 had been final seen down 24%, 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 chubby adults, with out sort 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 observe on Monday: “A 19% remedy discontinuation charge as a result of… hostile occasions… just isn’t a rounding error, and nausea, vomiting, diarrhea, and constipation incidence on the ranges reported right here sit properly above what we contemplate commercially viable towards [rival drugs] tirzepatide and semaglutide.”
The total survodutide information comes about three months after Zealand inventory suffered its worst day on record when a trial of one other of its experimental anti-obesity medicine, 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 because the topline in March,” mentioned Barclays.
Petrelintide, which Zealand is creating along with Roche, appears engaging by way of tolerability, however efficacy doesn’t look as robust as Eli Lilly’s amylin, eloralintide, or different already out there incretin-primarily based weight problems remedies, they added.
The marketplace for weight reduction medicine is at the moment 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 medicine, 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 stress on corporations to distinguish their merchandise. Muscle mass preservation, oral options, obesity-related ailments, and weight administration are some areas corporations are concentrating on to construct their share of the profitable market.
As for Zealand Pharma, it has lengthy known as for an finish to what it calls the “weight reduction olympics,” and says there may be an outsized deal with share weight reduction achieved.
CEO Adam Steensberg told CNBC in March he was “extraordinarily sure” there can be a shift within the trade “in the direction of tolerability,” referring to how properly sufferers can deal with unwanted side effects of the drugs.
“I believe very, very quickly, individuals begin to notice that it isn’t about that weight reduction quantity, it is about the way you obtain that weight reduction quantity.”
