Shares of Zealand Pharma dropped sharply, with a 23% decline after data revealed that 19% of patients discontinued treatment with its weight loss drug survodutide due to severe side effects. This prompted UBS analysts to cut their price target from 730 to 540 Danish kroner and reduce peak sales estimates for survodutide by nearly 80%.
Despite the setbacks, analysts remain optimistic about petrelintide, an amylin-based drug, which is expected to enter late-stage trials later this year. The market is increasingly valuing petrelintide as a potential growth driver, especially given the demand for drugs with better tolerability profiles.
CEO Adam Steensberg highlighted the importance of petrelintide's tolerability in comparison to existing therapies, particularly as the obesity treatment landscape becomes more competitive with players like Eli Lilly.
Analysts noted that the high dropout rates for survodutide, which were significantly worse than leading obesity treatments, could impact investor sentiment and the company's future prospects. The focus now shifts to how petrelintide can differentiate itself in a crowded market, with upcoming trial results being crucial for its success