Zealand Pharma collapses in Copenhagen, experimental anti-obesity drug disappoints

(Il Sole 24 Ore Radiocor) - Zealand Pharma plunged on the Copenhagen Stock Exchange after the disappointing outcome of interim tests on its anti-obesity drug developed jointly with Swiss giant Roche. The Danish biotech's stock dropped 33%, in what is its worst trading day ever and brings its loss since the start of the year to around 46%. The stock is also the worst in the Stoxx Europe 600. On the Zurich Stock Exchange, meanwhile, Roche lost 3% and ended at the bottom of the Smi index.

Zealand Pharma released the results of a phase 2 study of the anti-obesity drug petrelintide, which failed to meet investor expectations, as the weight loss of the 493 patients who participated in the trial averaged 10.7% after 42 weeks. This is a lower result than those reported by other competing anti-obesity treatments, including an amylin-based drug candidate from Eli Lilly, which resulted in a weight loss of up to 20.1% in a comparable interim study.

Zealand Pharma points out that its drug has 'demonstrated similar tolerability to placebo' and 'at the maximum dose, there have been no cases of vomiting or treatment interruptions due to gastrointestinal adverse events'. According to the Danish biotech 'the data reinforce the further development of petrelintide in chronic weight management, both as monotherapy and as combination therapy'. Analysts point out, however, that the increasingly fierce competition for anti-obesity drugs has raised the bar considerably in terms of efficacy as pharmaceutical companies vie for a share of a market expected to generate tens of billions of dollars annually.

Investors are closely following developments, preferring reassuring data and severely penalising disappointing ones. Even industry pioneer Novo Nordisk slumped last month when tests of its next-generation obesity drug showed lower results than Lilly's competing treatment in a comparative study. For Panmure Liberum, the average weight loss of 10.7% is less than the 13-15% predicted by analysts and far from the 20% offered by Eli Lilly's Eloralintide, the market leader. According to the London-based investment bank, the only advantage of the Zealand Pharma/Roche treatment lies in its lower drop-out rate of around 5%.

"Similar efficacy potential to Wegovy, but with near placebo-like tolerability, suggests this is a viable drug, although for now it will probably be considered a second-line option after Lilly's Elora," Jefferies analysts comment in a note to clients. Opinion shared by KBC Securities, according to which petrelintide may be more suitable for weight loss maintenance. "We believe this result makes a first-line position difficult" for the drug, the Belgian testing firm said. Roche has partnered with Zealand for the joint development of petrelintide in March 2025, calling the deal "almost perfect" as part of the two companies' efforts to compete with leaders in the obesity market.