Photo by National Cancer Institute on Unsplash

Pfizer's shares plunged on Friday after the drugmaker halted the trial of its twice-daily obesity drug.

fizer (NYSE: PFE), the world’s biggest pharma company, announced on Friday it has halted the trial of its twice-daily obesity drug, citing side effects in an earlier study. The drug, called danuglipron, is an oral version of the popular category of weight loss drugs dominated by Novo Nordisk and Eli Lilly. Pfizer’s shares fell over 6% at the market open, amplifying its year-to-date losses to 44.2%.

Pfizer Cancels Obesity Drug Trial Due to Side Effects

Shares of Pfizer opened 6.2% lower on Friday after the pharmaceutical giant said it would not proceed to a Phase 3 trial of a twice-daily formulation of its weight-loss drugs. The decision was made because multiple patients suffered from numerous side effects in an earlier study.

Notably, the drugmaker said the Phase2b study of its obesity pill danuglipron in adults reached its primary endpoint of statistically noteworthy change in body weight compared with placebo. 

“Danuglipron demonstrated mean placebo-adjusted weight reductions ranging from -8% to -13% at 32 weeks and -5% to -9.5% at 26 weeks.”

Pfizer said in the press release.

The stock was down at $28.58 at the time of writing, bringing its year-to-date losses to almost 45%, significantly underperforming the broader S&P 500 index, which gained over 19% during the same period.

A rapid decline in sales caused the overall downtrend in Pfizer’s shares as the world recovered from the multi-year coronavirus pandemic, pushing down the demand for COVID-19 products. The company reported a Q3 loss after facing charges mainly related to challenges around its COVID-19 vaccine and the antiviral treatment Paxlovid.

Novo Nordisk and Eli Lilly Continue to Spearhead the Obesity Drug Trend

Pfizer’s efforts to develop an oral treatment for obesity and diabetes came amid a trend started by popular injectables Wegovy, Ozempic, and Mounjaro. Novo Nordisk developed the first two, while the latter belongs to pharma giant Eli Lilly.

These drugs have been the key drivers of Novo Norisk’s and Eli Lilly’s growth, whose stocks surged 48% and 64.31% in 2023, respectively. Those drugs are GLP-1 receptor agonists, developed to mimic the effects of a gut hormone that helps keep appetite and blood sugar levels in check. 

Mounjaro and Ozempic were both granted regulatory approval in the US for treating type 2 diabetes rather than for weight loss. However, Zepbound by Eli Lilly, sharing the same active ingredient as Mounjaro, and Wegovy, which has the identical active ingredient as Ozempic, has received approval from the US Food and Drug Administration for weight management.

How long do you think Novo Nordisk and Eli Lilly can continue capitalizing on the pharma’s latest obesity drug trend? Let us know in the comments below. 

More By This Author: