Shares of Kailera Therapeutics fell 10% on Tuesday, a decline triggered by late-stage trial results showing that its oral weight loss drug produced high rates of nausea and vomiting despite successfully reducing body weight. The Waltham, Massachusetts-based biotechnology company announced topline results from two Phase 3 trials of HRS-7535, a once-daily oral drug developed by China's Jiangsu Hengrui Pharmaceutical and licensed to Kailera.
In the obesity trial, called HARBOR-1, participants taking the 180 mg dose lost an average of 10.9% of body weight by week 44, compared with 2.5% in the placebo group, the company said. Side effects were widespread: roughly 70% of patients in the active-dose groups reported nausea, while vomiting affected more than 65%. In the placebo group, those figures were 16.2% and 4.5%, respectively.
William Blair analyst Andy Hsieh, quoted by Reuters, argued that the drug's tolerability profile would need to improve substantially before it could be considered competitive, suggesting nausea rates closer to the mid-30s and vomiting rates in the mid-20s as thresholds to watch.
The second trial, OUTSTAND-2, tested HRS-7535 in 810 adults with type 2 diabetes in China. The drug met its primary endpoint, demonstrating non-inferiority to AstraZeneca $AZN's dapagliflozin across all dose levels in reducing HbA1c, a marker of long-term blood sugar control, the company said. The 90 mg dose group also showed a reduction in HbA1c that was superior to dapagliflozin.
No liver safety signals were detected in either trial, and treatment discontinuation rates due to side effects were low — 4.1% and 3.1% for the 120 mg and 180 mg doses, respectively, versus 2.7% for placebo, Kailera said.
Kailera is currently running a separate global Phase 2 trial of the drug, known as KAI-7535, in the U.S. and Australia. That trial, which started in April 2026, is designed to test a lower starting dose of 15 mg with a more gradual dose escalation schedule intended to improve tolerability. Results are expected in 2027, the company said.
At its founding in October 2024, the company secured $400 million to get off the ground and brought four obesity drug candidates into its portfolio through a licensing arrangement with Hengrui, according to Reuters. The company's pipeline also includes ribupatide injection, a once-weekly injectable drug currently in global Phase 3 trials, as well as a once-daily oral formulation of ribupatide under development.