Zealand Pharma slump wipes billions off its value after obesity drug data disappoints

March 6 (Reuters) – Shares in Zealand Pharma tumbled more than 30% on Friday, putting the Danish biotech firm on track for its worst trading day on record, after mid-stage trial results for obesity drug petrelintide fell short of investor expectations.

The drug, which Zealand is developing with Roche, helped patients lose up to 10.7% of their body weight over 42 weeks in a study of 493 patients, according to results released on Thursday.

The outcome lags behind results reported for rival obesity treatments, including an amylin-based drug candidate from Eli Lilly that produced weight loss of up to 20.1% in a comparable mid-stage trial.

The intensifying race for obesity drugs has set a high bar for efficacy, as drugmakers compete for a slice of a market expected to generate tens of billions of dollars annually.

The disappointment follows a recent setback for Novo Nordisk, whose shares slumped last month after its next-generation obesity drug underperformed Lilly’s rival treatment in a head-to-head trial.

Zealand shares hit their lowest level since August 2023 in early Copenhagen trading, wiping roughly 8.3 billion Danish crowns ($1.3 billion) from the company’s market value.

“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,” Jefferies said in a note to clients. 

KBC Securities echoed this view, suggesting petrelintide might be better suited for weight loss maintenance.

“We think this outcome makes first line positioning difficult,” the Belgian brokerage said.

Roche partnered with Zealand to co-develop petrelintide in March 2025, describing the deal as a “nearly perfect fit” in the companies’ effort to compete with obesity market leaders.

($1 = 6.4350 Danish crowns)

(Reporting by Jesus Calero and Jagoda Darlak in Gdansk, editing by Milla Nissi-Prussak)