Novo Nordisk and Eli Lilly rival soars 26% after promising weight-loss drug results
Vials move along a conveyor at the Novo Nordisk A/S production facilities in Hillerod, Denmark, on Monday, June 12, 2023. The success of Novo’s bestsellers Ozempic and Wegovy, drugs that help people lose significant amounts of weight, has created something of a gold rush in the pharma industry with about 40 companies developing products that will intensify competition.
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Shares of Denmark’s Zealand Pharma rocketed higher, after the company posted strong results from a trial of a liver disease treatment that has been touted as a potential competitor in the booming weight-loss drug market.
The Phase 2 trial of the survodutide drug showed 83% of adults saw positive results for a form of liver inflammation caused by excess fat cells known as “MASH,” the company said in an announcement on Monday.
The drug has “demonstrated efficacy” in people with obesity and is currently undergoing five Phase-3 trials in a clinical program for people who are overweight or obese. It has received fast-track designation from the U.S. Food and Drug Administration.
Analysts latched onto the drug’s possible efficacity in obesity research following the latest test results, which indicated the safety of the top dosage used in that trial.
Shares of Zealand Pharma swelled by 26% by 10:26 a.m. London time, amid enthusiasm for the company’s potential in the highly lucrative obesity market that propelled fellow Danish drugmaker Novo Nordisk to become Europe’s most valuable firm on its development of Ozempic and Wegovy. Several other firms, including Eli Lilly, Roche and AstraZeneca, also seek to compete in the sector.
“Top-line results demonstrated an improvement in MASH, at all doses explored in the trial. Treatment with survodutide did not show unexpected safety or tolerability issues, including at the higher dose of 6.0 mg,” Michael Novod, head of bank Nordea’s healthcare equity research team, said in a Monday note, hailing the latest Zealand Pharma results as an “unequivocal win for survodutide.”
“Importantly, the [Phase 2] MASH trial also tells us that the 6mg dose is safe, which is the top dose used in the ongoing [Phase 3] obesity trial too,” he added.
Analysts at Jefferies assessed that Zeal Pharma’s “position as a key player in next wave of obesity therapeutics is underappreciated,” noting the significance of the German co-inventor Boehringer Ingelheim‘s announcement that the drug will advance as “quickly as possible” with treatment on liver diseases and related conditions.
Pharmaceutical firm Boehringer Ingelheim is funding and running clinical development of survodutide.
