Zealand Pharma pauses development of early-stage obesity drug candidate

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(Reuters) -Denmark’s Zealand Pharma said on Thursday it has paused the development of an early-stage obesity drug candidate as it shifts focus to more promising programs.

The drug dapiglutide, a GLP-1/GLP-2 receptor dual agonist designed for weight loss and reducing low-grade inflammation associated with obesity, was previously planned to enter mid-stage trials this year.

“Zealand is pausing development in recognition of the increasingly crowded GLP-1 space, with demonstration of dapiglutide’s potential anti-inflammatory effects requiring long and complex trials,” Jefferies analyst Lucy Codrington said in a note.

Denmark-listed shares of Zealand rose more than 5%.

The booming market for weight-loss drugs, which analysts estimate could be worth $150 billion annually by the end of the decade, is currently dominated by drugs that mimic the gut hormone GLP-1, including Eli Lilly’s Zepbound and Danish rival Novo Nordisk’s Wegovy.

In its earnings report on Thursday, Zealand said it will focus on “programs with the greatest potential for clinical differentiation and long-term value creation”.

The Danish biotech, in partnership with Roche, is also developing petrelintide, an obesity candidate targeting the pancreatic hormone amylin, which has shown fewer and less severe gastrointestinal side effects in early trials.

The company expects mid-stage trial data in the first half of next year.

A similar candidate from Eli Lilly, eloralintide, helped patients lose up to 20.1% of their weight in a mid-stage study last week and is set to enter late-stage trials next month.

Jefferies analysts expect Zealand’s petrelintide to deliver 15% to 20% weight loss longer term, but noted it is “difficult to push a best-in-class narrative until we have more comparable data”.

Zealand said on Thursday it expects 2025 operating expenses to range between DKK 2.0 billion and DKK 2.3 billion ($671.57 million), narrowing its earlier forecast of DKK 2.0 billion to DKK 2.5 billion ($702.81 million).

($1 = 6.4029 Danish crowns)

(Reporting by Mariam Sunny in Bengaluru; Editing by Vijay Kishore)