Zealand Pharma rises 32 after promising results in weight loss

Zealand Pharma rises 32% after promising results in weight loss drugs

Vials move along a conveyor belt at Novo Nordisk A/S's production facilities in Hillerod, Denmark, on Monday, June 12, 2023. The success of Novo's best-sellers Ozempic and Wegovy, drugs that help people lose significant amounts of weight, has created a gold rush in the pharmaceutical industry, with around 40 companies developing products that are ramping up competition.

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Shares in Denmark's Zealand Pharma jumped after the company reported strong results from a study of a liver disease treatment drug that was touted as a potential competitor in the booming weight-loss drug market.

The Phase 2 trial of the drug survodutide showed that 83% of adults saw positive results for a form of liver inflammation caused by excess fat cells called “MASH,” the company said in an announcement Monday.

The drug has shown “effective efficacy” in people with obesity and is currently undergoing five Phase 3 trials in a clinical program for people who are overweight or obese. It has received Fast Track designation from the US Food and Drug Administration.

Analysts recognized the drug's potential effectiveness in obesity research due to recent test results indicating the safety of the maximum dose used in this study.

Shares in Zealand Pharma were up 32% at 11:15 a.m. London time, boosted by excitement over the company's potential in the highly lucrative obesity market The development of Ozempic and Wegovy will make Danish drugmaker Novo Nordisk the most valuable company in Europe. Several other companies, including Eli Lilly, Roche and AstraZeneca, are also trying to compete in the sector.

“The top-line results showed improvement in MASH at all doses examined in the study. Treatment with survodutide showed no unexpected safety or tolerability issues, even at the higher dose of 6.0 mg,” said Michael Novod, head of healthcare at Bank Nordea. The research team said in a statement on Monday, welcoming Zealand's latest development Pharma Results as a “clear victory for Survodutide”.

“It's important, that [Phase 2] The MASH study also shows us that the 6 mg dose is safe, which is the highest dose used in the current study [Phase 3] “Obesity study too,” he added.

Analysts at Jefferies concluded that Zeal Pharma's “position as a key player in the next wave of obesity therapeutics is underestimated,” citing the importance of German co-inventor Boehringer Ingelheim'S Announcement that the drug will be further developed as “as quickly as possible” for the treatment of liver disease and related conditions.

The pharmaceutical company Boehringer Ingelheim is financing and leading the clinical development of survodutid.