Zealand Pharma shares fell as much as 23% after new survodutide data fueled investor concern over side effects despite positive trial targets.
Shares of Zealand Pharma fell as much as 23% on Monday after new data on its experimental weight-loss drug raised fresh concerns about side effects, adding pressure to a stock that had already lost nearly half its value this year.
The Danish drugmaker said survodutide, which it has licensed to privately held Boehringer Ingelheim, met key targets in a late-stage study. But the safety profile drew investor attention: 19% of patients stopped treatment because of gastrointestinal events, compared with 2.9% of those receiving placebo.
Barclays analysts said in a Monday note that “safety/tolerability remains the key issue,” calling the results disappointing for Zealand even as the data showed some encouraging signals tied to body composition and liver health.
The trial tested survodutide over 76 weeks in adults living with obesity or in overweight adults without type 2 diabetes. Topline data released in April showed average weight loss of up to 16.6%, compared with 3.2% for placebo.
The concern for investors is whether that benefit is enough in a crowded and increasingly competitive obesity-drug market. More than 40% of patients reported vomiting, a level analysts said could limit the medicine’s commercial prospects in obesity or fatty liver disease.
Citi analysts were more blunt, writing that a 19% discontinuation rate tied to adverse events “is not a rounding error” and that rates of nausea, vomiting, diarrhea and constipation appeared high against rival drugs such as tirzepatide and semaglutide.
Zealand shares were last down 22.9%, placing the company at the bottom of the pan-European Stoxx 600 index. The decline follows another setback earlier this year, when data from petrelintide, a separate experimental anti-obesity drug Zealand is developing with Roche, disappointed investors with lower-than-expected weight-loss results.
The market is still dominated by Novo Nordisk’s semaglutide products, sold as Wegovy and Ozempic, and Eli Lilly’s tirzepatide drugs, sold as Zepbound and Mounjaro. With more companies chasing a share of the fast-growing field, investors are looking beyond headline weight-loss numbers to questions of tolerability, differentiation and whether patients can stay on treatment.
For Zealand, the latest results leave a familiar question unresolved: whether promising efficacy can translate into a drug profile strong enough to compete once safety and patient dropouts are weighed alongside weight loss.
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