Zealand Pharma Soars After Positive Trial Results for Weight Loss Drug
Shares in Danish biotech company Zealand Pharma surged on Friday following the announcement of positive results from an early-stage study of its weight loss drug candidate.
Stock Performance
At 10:00 ET, Zealand Pharma stock traded over 17% higher at DKK758, having doubled in value since the start of the year.
Study Results
Zealand Pharma revealed that a course of 16 weekly high doses of its long-acting amylin analog petrelintide reduced body weight by up to 8.6% on average in the study. In comparison, a placebo drug led to a body weight decrease of only 1.7%. Notably, only one out of 48 study participants withdrew due to negative effects.
Safety and Tolerability
Petrelintide was reported to be "safe and well tolerated" at all dose levels, providing "robust support" for its potential as an alternative to GLP-1 receptor agonist-based therapies for weight management.
Analyst Reactions
Analysts at Jefferies highlighted the significance of the study results, noting that a 16-week amylin weight loss of 8.6% hits the upper-end of the 7%-9% target range, suggesting potential for ≥15% in longer trials. Additionally, the high percentage of males and low baseline BMI among participants might indicate even better future results.
Jefferies maintains a ‘buy’ rating for Zealand Pharma, with a projected peak sales of $10 billion and a price target of DKK790 per share.
Market Outlook
BTIG analysts were also impressed, stating that the data further reinforce petrelintide's best-in-class potential as an amylin analog for treating obesity. They anticipate additional positive outcomes through several data catalysts expected later in 2024. BTIG continues to view Zealand Pharma positively, maintaining a ‘buy’ rating and setting a price target of DKK840.
Overall, Zealand Pharma has outperformed so far this year, and with promising results from its weight loss drug studies, there is additional room for upside growth in the near future.
