Zealand Pharma's Weight-Loss Drug Falls Short, Shares Plummet

Shares in Zealand Pharma dropped over 30% as trial results for its obesity drug petrelintide missed expectations. The drug showed a weight loss of up to 10.7%, lagging behind competitors. Challenges in the obesity drug market affect company valuations, raising questions about first-line positioning.

Zealand Pharma's shares plunged more than 30% on Friday, marking a record low for the Danish biotech firm. This downturn follows underwhelming mid-stage trial results for the company's obesity drug, petrelintide, which failed to meet investor expectations.

Developed in partnership with Roche, petrelintide succeeded in helping patients achieve up to 10.7% body weight reduction over 42 weeks. However, these results were less impressive compared to Eli Lilly's amylin-based candidate, which reported up to 20.1% weight loss in a similar trial.

The competitive obesity drug market is challenging companies like Zealand Pharma, as they strive for a share of the multibillion-dollar market. The company's stock took a hit, wiping out 8.3 billion Danish crowns in market value, as questions arise over petrelintide's strategic positioning.

(With inputs from agencies.)