Shares in Danish biotech firm Zealand Pharma plummeted over 30 per cent on Friday, putting the company on track for its worst trading day on record.
The dramatic fall followed the release of mid-stage trial results for its obesity drug, petrelintide, which ultimately fell short of investor expectations.
The drug, developed in collaboration with Roche, helped patients lose up to 10.7 per cent of their body weight over 42 weeks in a study of 493 participants.
However, that outcome lagged behind rival obesity treatments, notably an amylin-based drug from Eli Lilly, which achieved up to 20.1 per cent weight loss in a comparable mid-stage trial.
Jefferies analyst said the drug had “potential for Wegovy-like efficacy, but with placebo-like tolerability does suggest this is a viable drug, though likely viewed as 2nd-best to Lilly’s elora for now”.
The immediate market reaction saw early trading losses wipe 8.3 billion Danish crowns (£960 million) from Zealand Pharma’s market capitalisation.
In February, shares in Novo Nordisk fell more than 15 per cent in a single day, wiping away the last gains Wegovy’s launch had brought.
It came after the drug maker said its next-generation obesity drug CagriSema underperformed Eli Lilly’s tirzepatide in a trial.
The trial was designed to show CagriSema was at least as effective as tirzepatide in reducing weight, but failed to meet that goal, the Danish group said in a statement.
Novo, which was worth more than US$600 billion in 2024, has shed around $400 billion off that valuation, leaving the shares back at levels last seen before Wegovy transformed it into the world’s most valuable drugmaker.
J.P. Morgan analysts said the trial miss was a significant setback that could curb demand for CagriSema, temper long-term sales hopes and leave Novo struggling to win back share in the fast-growing obesity treatment market.
“While CagriSema could offer a new treatment option to patients, the inferiority to Zepbound means it is unlikely to help Novo retake market share in obesity,” they said.