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NVO, LLY, GPCR & VKTX Stocks Gain Following PFE's Obesity Study Setback
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Obesity stocks like Novo Nordisk (NVO - Free Report) , Eli Lilly (LLY - Free Report) , Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) gained 2.1%, 3%, 10.6% and 19.2%, respectively, on Monday after pharma bigwig Pfizer (PFE - Free Report) announced that it is discontinuing the development of its GLP-1R weight loss pill, danuglipron.
PFE’s Obesity Drug Causes Safety Issue in Phase III Study
Pfizer has decided to discontinue the development of its oral obesity drug danuglipron, despite promising results from dose-optimization studies that met key pharmacokinetic goals and showed potential for competitive efficacy and tolerability. Although liver enzyme elevations in the enrolled patients were generally consistent with other approved drugs in the same class, one patient experienced a potential case of drug-induced liver injury, which resolved after stopping treatment with danuglipron.
After reviewing all clinical data and considering regulatory feedback, Pfizer concluded that halting the program was the best course of action. This decision reverted Pfizer’s developmental program for an obesity candidate back to the early clinical stages and has significantly delayed its hopes for marketing an obesity drug that would compete with Lilly’s Zepbound and Novo Nordisk’s Wegovy for market share.
However, PFE shares have not slid despite the setback, which likely reflects positive investor expectations regarding Pfizer’s ability to bounce back from its current predicament. Pfizer plans to continue the development of its oral GIPR antagonist candidate, PF-07976016, which is currently in mid-stage development and other early-stage obesity programs. Pfizer could also in-license rights to a late-stage obesity candidate from other biotechs for developing and commercialization.
Interestingly, Jefferies reduced Pfizer’s price target from $34 to $32 following the setback, but maintained its BUY rating for the stock.
How PFE’s Obesity Study Setback Benefits VKTX, GPCR, LLY & NVO
Novo Nordisk and Eli Lilly currently dominate the obesity market on the back of the tremendous success of their GLP-1 injections. Lilly markets its dual GIP and GLP-1 receptor agonist, tirzepatide, as Zepbound for obesity, while Novo Nordisk markets its semaglutide drug as Wegovy injection for weight management.
Year to date, shares of PFE, LLY and NVO have lost 16.6%, 2.3% and 23.2%, respectively, compared with the industry’s 4.9% decline.
Image Source: Zacks Investment Research
Pfizer’s setback eliminates an imminent contender for LLY and NVO’s market share in the obesity space. Both firms have been raking in substantial revenues from the sale of their respective obesity injections. In 2024, Zepbound sales amounted to $4.9 billion, while Wegovy sales recorded $8.4 billion during the same time frame, both representing a substantial increase over their previous year's figures.
Shares of Lilly, Novo Nordisk, Viking Therapeutics and Structure Therapeutics rose as Pfizer's decision to discontinue its obesity pill program removes a key competitor from the market. Lilly and Novo Nordisk are also developing oral pills for treating obesity. Oral drugs are easier to use compared to injections, which can improve patient compliance. NVO is developing its oral obesity pill, amycretin, in a mid-stage study while Lilly’s oral obesity pill, orforglipron, is currently undergoing phase III development.
Viking Therapeutics and Structure Therapeutics also have oral obesity candidates in their pipeline in mid-stage development.
Year to date, shares of VKTX and GPCR have plunged 38.9% and 30.1%, respectively, compared with the industry’s 6.4% decline.
Image Source: Zacks Investment Research
VKTX is currently evaluating the safety and efficacy of the oral formulation of its experimental obesity drug, VK2735, in a mid-stage study. Last month, the company reported completing enrollment in the phase II VENTURE-Oral Dosing study of the candidate for the obesity indication. Data from this study is expected in the second half of 2025.
VKTX also plans to start a late-stage study on the subcutaneous version of VK2735 by the first half of this year.
On the other hand, Structure Therapeutics is conducting multiple mid-stage studies on its lead candidate, aleniglipron(GSBR-1290), a highly selective oral GLP-1 receptor agonist, for treating healthy overweight or obese individuals.
The rapid advancements being made by Viking Therapeutics and Structure Therapeutics in the development of their respective oral obesity treatment candidates have made them lucrative targets for collaboration or M&A deals.
Zacks Ranks
While Pfizer, Novo Nordisk, Eli Lilly and Structure Therapeutics currently carry a Zacks Rank #3 (Hold) each, Viking Therapeutics has a Zacks Rank #4 (Sell) at present.
Image: Bigstock
NVO, LLY, GPCR & VKTX Stocks Gain Following PFE's Obesity Study Setback
Obesity stocks like Novo Nordisk (NVO - Free Report) , Eli Lilly (LLY - Free Report) , Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) gained 2.1%, 3%, 10.6% and 19.2%, respectively, on Monday after pharma bigwig Pfizer (PFE - Free Report) announced that it is discontinuing the development of its GLP-1R weight loss pill, danuglipron.
PFE’s Obesity Drug Causes Safety Issue in Phase III Study
Pfizer has decided to discontinue the development of its oral obesity drug danuglipron, despite promising results from dose-optimization studies that met key pharmacokinetic goals and showed potential for competitive efficacy and tolerability. Although liver enzyme elevations in the enrolled patients were generally consistent with other approved drugs in the same class, one patient experienced a potential case of drug-induced liver injury, which resolved after stopping treatment with danuglipron.
After reviewing all clinical data and considering regulatory feedback, Pfizer concluded that halting the program was the best course of action. This decision reverted Pfizer’s developmental program for an obesity candidate back to the early clinical stages and has significantly delayed its hopes for marketing an obesity drug that would compete with Lilly’s Zepbound and Novo Nordisk’s Wegovy for market share.
However, PFE shares have not slid despite the setback, which likely reflects positive investor expectations regarding Pfizer’s ability to bounce back from its current predicament. Pfizer plans to continue the development of its oral GIPR antagonist candidate, PF-07976016, which is currently in mid-stage development and other early-stage obesity programs. Pfizer could also in-license rights to a late-stage obesity candidate from other biotechs for developing and commercialization.
Interestingly, Jefferies reduced Pfizer’s price target from $34 to $32 following the setback, but maintained its BUY rating for the stock.
How PFE’s Obesity Study Setback Benefits VKTX, GPCR, LLY & NVO
Novo Nordisk and Eli Lilly currently dominate the obesity market on the back of the tremendous success of their GLP-1 injections. Lilly markets its dual GIP and GLP-1 receptor agonist, tirzepatide, as Zepbound for obesity, while Novo Nordisk markets its semaglutide drug as Wegovy injection for weight management.
Year to date, shares of PFE, LLY and NVO have lost 16.6%, 2.3% and 23.2%, respectively, compared with the industry’s 4.9% decline.
Image Source: Zacks Investment Research
Pfizer’s setback eliminates an imminent contender for LLY and NVO’s market share in the obesity space. Both firms have been raking in substantial revenues from the sale of their respective obesity injections. In 2024, Zepbound sales amounted to $4.9 billion, while Wegovy sales recorded $8.4 billion during the same time frame, both representing a substantial increase over their previous year's figures.
Shares of Lilly, Novo Nordisk, Viking Therapeutics and Structure Therapeutics rose as Pfizer's decision to discontinue its obesity pill program removes a key competitor from the market. Lilly and Novo Nordisk are also developing oral pills for treating obesity. Oral drugs are easier to use compared to injections, which can improve patient compliance. NVO is developing its oral obesity pill, amycretin, in a mid-stage study while Lilly’s oral obesity pill, orforglipron, is currently undergoing phase III development.
Viking Therapeutics and Structure Therapeutics also have oral obesity candidates in their pipeline in mid-stage development.
Year to date, shares of VKTX and GPCR have plunged 38.9% and 30.1%, respectively, compared with the industry’s 6.4% decline.
Image Source: Zacks Investment Research
VKTX is currently evaluating the safety and efficacy of the oral formulation of its experimental obesity drug, VK2735, in a mid-stage study. Last month, the company reported completing enrollment in the phase II VENTURE-Oral Dosing study of the candidate for the obesity indication. Data from this study is expected in the second half of 2025.
VKTX also plans to start a late-stage study on the subcutaneous version of VK2735 by the first half of this year.
On the other hand, Structure Therapeutics is conducting multiple mid-stage studies on its lead candidate, aleniglipron(GSBR-1290), a highly selective oral GLP-1 receptor agonist, for treating healthy overweight or obese individuals.
The rapid advancements being made by Viking Therapeutics and Structure Therapeutics in the development of their respective oral obesity treatment candidates have made them lucrative targets for collaboration or M&A deals.
Zacks Ranks
While Pfizer, Novo Nordisk, Eli Lilly and Structure Therapeutics currently carry a Zacks Rank #3 (Hold) each, Viking Therapeutics has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.