Zealand Pharma’s volatility shows investors are putting more weight on tolerability as the obesity-drug race shifts toward amylin-based medicines.
Zealand Pharma’s recent stock swings are highlighting a new pressure point in the booming weight-loss drug market: investors are no longer focused only on how much weight a medicine can help patients lose, but also on whether patients can stay on treatment.
The Copenhagen-listed biotech tumbled 23% earlier this month after detailed data for survodutide, a weight-loss drug it has licensed to Boeringer Ingelheim, showed side effects severe enough for 19% of patients to stop treatment. The drug still met its main target, producing average weight loss of 16.6%.
That selloff followed a 36% drop in March, after Zealand’s lead amylin-based medicine, petrelintide, produced lower-than-expected efficacy of just under 11% in a mid-stage trial. Chief Executive Adam Steensberg said that study had not been optimized for weight loss. CNBC reported that the two declines were the stock’s worst single-day performances since Zealand went public in 2010.
The market reaction reflects a broader debate across obesity drug development. As more companies pursue alternatives to current GLP-1 medicines, analysts are comparing candidates not just on weight-loss numbers, but on side effects, discontinuation rates and their potential role in long-term weight maintenance.
For survodutide, the discontinuation rate due to adverse events was sharply higher than for leading marketed therapies. Its placebo-adjusted discontinuation rate was 18.8%, compared with roughly 4% for Wegovy and Zepbound, according to the CNBC report.
UBS analysts cut their Zealand price target to 540 Danish kroner from 730 kroner and reduced their peak sales forecast for survodutide by nearly 80%. Even so, they kept a Buy rating, saying they remained positive on petrelintide, which they called the company’s most important asset.
That has shifted attention toward amylin-based drugs, a category that drew focus at the American Diabetes Association’s Scientific Sessions in New Orleans. Amylin, like GLP-1, is a natural hormone involved in blood sugar and appetite regulation, though it is produced in the pancreas rather than the gut.
Zealand is developing petrelintide with Roche and is expected to begin late-stage trials in the second half of the year. The company is also due to report mid-stage results for petrelintide in diabetes patients, a group that typically has more difficulty losing weight.
The opportunity is not uncontested. Eli Lilly is developing its own amylin-based medicine, eloralintide, and its retatrutide data added to the competitive pressure around the ADA meeting. Jyske Bank analyst Henrik Hallengreen Laustsen told CNBC that Zealand still needs to show what differentiates petrelintide from other amylin products, with Lilly and Novo Nordisk strongly placed in both the current and future market.
For now, Zealand’s volatility points to a narrower market message: survodutide may be viewed more as a possible liver-disease asset, while petrelintide increasingly carries the company’s obesity-growth story. Several analysts cited by CNBC said a clearer turning point for Zealand may not come until 2027.
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