Zealand Pharma Shares Plunge on Obesity Drug Tolerability Concerns
New data reveals a high rate of side effects that could limit the commercial potential of the experimental obesity treatment.
"The 19% discontinuation rate is not a rounding error." – Citi analysts
Shares of Zealand Pharma fell 25% on Monday after the release of full data from a late-stage study of its experimental obesity drug, survodutide. The data showed a 19% treatment discontinuation rate due to gastrointestinal adverse events, compared to just 2.9% for the placebo group.
While the drug, which is licensed to Boehringer Ingelheim, met its primary efficacy endpoint—achieving up to 16.6% weight loss versus 3.2% for placebo—analysts quickly flagged significant concerns about its tolerability.
- Barclays analysts described the safety and tolerability data as "disappointing," noting that over 40% of patients reported vomiting. This, they said, "may limit commercial potential."
- Citi analysts emphasized that the incidence of nausea, vomiting, diarrhea, and constipation was higher than what is considered "commercially viable" against established rivals like tirzepatide and semaglutide.
The setback for survodutide comes just three months after Zealand's stock experienced its worst day on record, following disappointing results from a trial of another experimental drug, petrelintide. That drug showed lower-than-expected weight loss, and further data released on Friday provided incremental detail but did not shift Barclays' cautious outlook.
Petrelintide, which is being developed in partnership with Roche, appears tolerable, but its efficacy is not as strong as Eli Lilly's eloralintide or other incretin-based obesity treatments.
Zealand Pharma's shares are now at the bottom of the Stoxx 600 and have dropped nearly 50% year-to-date.