Zealand Pharma shares surge after positive results of weight-loss drug that could contend with GLP-1s

By Barbara Kollmeyer

Shares of Zealand Pharma soared on Friday after the Danish biotech company reported positive results from a trial of its experimental weight-loss injection, that could compete with popular GLP-1s drugs.

Zealand Pharma stock (DK:ZEAL) jumped 20% to a record DKR775, reaching as high as DKR824, following the company's announcement late Thursday. Its Phase 1B study showed that patients using higher doses of its petrelintide treatment for 16 weeks lost 8.6% of their body weight.

"These results support our conviction that petrelintide is very well tolerated and can potentially play an important role as an alternative to incretin-based therapies for the management of overweight and obesity," David Kendall, MD, chief medical officer of Zealand Pharma, said in a statement.

Petrelintide belongs to a group of long-acting amylin analogs that have shown promise in weight loss and glucose stabilization. Kendall said the data will "pave the way for rapid progression" to Phase 2B trials later this year, and provide further support for those amylin analogs to "deliver weight loss comparable to GLP-1 receptor agonists with a better patient experience."

Zealand Pharma's success could make it a competitor for GLP-1 drugs, with Eli Lilly (LLY) and Novo Nordisk (DK:NOVO.B) (NVO) among the world's highest-valued drug companies, amid massive popularity for their GLP-1 treatments.

"We note that the study population was 79% male, whom typically lose less weight on drug, plus low median/mean baseline BMI of 29kg/m2...suggesting potential for higher weight loss when conducted in a more balanced population, in our view," said a team of analysts at Jefferies led by Lucy Codrington.

The analysts added that the GLP-like amylin have an "improved tolerability profile." First, in the induction stage they offer potential for lower and milder gastrointestinal issues and an alternative for the 10% to 20% of patients that can't tolerate incretins, or metabolic hormones that stimulate reduction in blood glucose levels.

In the weight-loss maintenance stage, amylin may help to "induce satiety," as opposed to food aversion brought about by GLP-1-based therapies, "which could be important for long-term use and potentially lead to a higher-quality and more sustainable weight loss."

"Amylin also has possible cardiovascular benefits in addition to GLP-1, pluspotential for a better quality of weight loss through lean mass preservation," added Jefferies, which is forecasting $10 billion peak sales.

-Barbara Kollmeyer

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06-21-24 0455ET

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