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Zealand Pharma shares fell sharply on Friday after an obesity drug candidate being developed with Roche posted disappointing results in a mid-stage trial.
Shares in the Danish biotech fell 34 per cent in Copenhagen after phase 2 clinical trial data for its drug petrelintide showed patients lost 10.7 per cent of their body weight on average after 42 weeks of treatment.
The results wiped billions of krone off Zealand’s market value, even though the drug met its primary target and showed side-effects similar to a placebo. The company said there were no cases of vomiting and no discontinuation of treatment due to gastrointestinal issues at the maximum dosage.
It is a setback for both Zealand and Roche, which are seeking to gain ground in the increasingly competitive obesity treatment market dominated by Novo Nordisk and Eli Lilly.
Roche licensed petrelintide from Zealand last year for up to $5.3bn — if all targets are met — making it one of the biggest deals in the sector. Shares in Roche fell more than 3 per cent in morning trading in Zurich.
Barclays analysts described the data as “disappointing” because it had fallen short of the 13 per cent weight reduction that could have made it “competitive”. The drug is not expected on the market until 2029 if it proceeds to a phase 3 trial and receives regulatory approval.
Roche and Zealand are looking to compete in a treatment area where the market leaders deliver weight reduction of up to 25 per cent in some cases.
Petrelintide is based on the hormone amylin that makes people feel full faster. In contrast, market leaders such as Novo’s Wegovy and Ozempic and Lilly’s Mounjaro and Zepbound belong to a class of medicines based on the gut hormone GLP-1 that suppresses appetite.
Lilly reported last year that its amylin competitor eloralintide helped trial participants achieve 20.1 per cent weight loss at the upper end in a phase 2 trial. Studies have shown that amylin-based treatments cause fewer side-effects than GLP-1 drugs.