Zealand Pharma Shares Plunge 26% Amid Concerns Over Drug Side Effects
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: CNBC
- Disappointing Drug Trial Results: Zealand Pharma's experimental drug survodutide met key targets in late-stage studies, yet 19% of patients dropped out due to gastrointestinal events, significantly higher than the 2.9% in the placebo group, indicating serious safety and tolerability concerns that could hinder market potential.
- High Discontinuation Rate Impacts Commercial Viability: With over 40% of patients reporting vomiting, analysts warn that this high dropout rate may limit the drug's prospects for treating obesity or fatty liver disease, leading to a decline in investor confidence.
- Significant Stock Price Drop: Zealand Pharma's shares plummeted 24% on Monday, adding to a nearly 50% decline year-to-date, reflecting the market's disappointment with the company's drug development outcomes.
- Increased Competitive Pressure: Citi analysts highlighted that a 19% treatment discontinuation rate and high incidence of nausea and vomiting far exceed acceptable levels compared to rival drugs tirzepatide and semaglutide, intensifying competitive pressures in the anti-obesity drug market.
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Analyst Views on LLY
Wall Street analysts forecast LLY stock price to rise
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 1136.370
Low
950.00
Averages
1192
High
1500
Current: 1136.370
Low
950.00
Averages
1192
High
1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, and market products in a single business segment called human pharmaceutical products. The Company manufacture and distribute its products through facilities in the United States, including Puerto Rico, and in Europe and Asia. The Company’s products are sold in approximately 90 countries. Its Cardiometabolic Health products Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound, and others. Its oncology products include Cyramza, Erbitux, Tyvyt, Verzenio, Retevmo, Jaypirca, and others. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. Its LillyDirect, a direct-to-patient digital health care platform, provides delivery of select Lilly medicines dispensed by third-party pharmacies to patients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cost Pressures: The survey indicates that 72% of employers currently covering GLP-1s plan to continue, but Ellen Kelsay highlights that soaring healthcare costs, particularly from GLP-1s and other prescriptions, are driving changes in coverage policies.
- Health Benefits Expectations: While over half of employers believe GLP-1 drugs will provide significant health benefits, few have observed tangible results, including a decrease in obesity rates reflected in employee claims.
- Market Demand Outlook: 87% of employers expect newly approved oral GLP-1 drugs to increase overall demand, impacting prices, with only 9% anticipating a price decline, indicating strong market demand for this drug class.
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- Insurance Policy Adjustments: Cigna ceased coverage for weight-loss medications for its employees in July, prompting them to seek discounted prices directly from drug manufacturers' websites, a shift that may influence future drug coverage policies.
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