Shares of Zealand Pharma dropped as much as 23% after the company reported concerning data regarding its experimental weight loss drug, survodutide. Although the drug met key targets in a late-stage study, 19% of participants discontinued treatment due to gastrointestinal issues, a stark contrast to the 2.9% dropout rate in the placebo group.
Barclays analysts expressed disappointment in the drug's safety and tolerability, noting that over 40% of patients experienced vomiting, which could hinder its commercial viability against competitors like tirzepatide and semaglutide. The stock's decline adds to a nearly 50% drop year-to-date, reflecting investor skepticism following a previous setback with another drug, petrelintide.
The weight loss drug market is becoming increasingly competitive, with major players like Novo Nordisk and Eli Lilly leading the way, while new entrants like Zealand Pharma strive to differentiate their offerings. Zealand's CEO has emphasized the importance of tolerability over sheer weight loss numbers, suggesting a potential shift in industry focus.
However, the current data raises significant concerns about the drug's market potential