Zealand Pharma's Shares Plummet After Disappointing Drug Trial Results

Shares of Danish biotech company Zealand Pharma plummeted by more than 30% on Friday, marking the company's worst trading day in history. The sharp decline followed the release of mid-stage trial results for their obesity drug, petrelintide, which did not meet investor expectations.

The drug, developed in conjunction with Roche, demonstrated a maximum weight loss of 10.7% over a 42-week period in a study involving 493 patients. However, the outcomes were underwhelming compared to rival obesity treatments, including an amylin-based drug from Eli Lilly showing a 20.1% weight loss in a similar trial.

Jefferies analysts noted that although the drug shows potential with efficacy similar to Wegovy and tolerability akin to a placebo, it is considered secondary to Lilly's elora. The disappointing results led to a loss of approximately 8.3 billion Danish crowns ($1.3 billion) in market capitalization early Friday.