Zealand Pharma stock was soaring more than 34% on Monday, after the company announced strong results in a clinical trial for a liver disease drug that is also being tested for weight loss.
The news was welcomed by investors who are looking for the next blockbuster weight loss drug that could compete with the market’s current leaders, Novo Nordisk and Eli Lilly.
The Denmark-based company is developing the drug, survodutide, with the privately held German pharma giant Boehringer Ingelheim. The two companyies announced Monday that their phase two trial found that 83% of patients on the treatment saw significant improvements to a liver condition known as MASH.
Survodutide is also currently going through a phase three clinical trial for treating obesity. Previous trials demonstrated that it helped users lose nearly 15% of their weight in 46 weeks.
The economic power of weight loss drugs
Weight loss drugs have had a significant impact on the economy in the past few years. Skyrocketing demand for Novo Nordisk’s Wegovy and Ozempic even helped boost Denmark’s GDP in 2023, and sales are expected to continue to grow in the new year. Novo Nordisk projects that its sales will increase by up to 26% in 2024, according to its latest quarterly earnings report.
Norway’s sovereign wealth fund said earlier this year that booming demand for these drugs could lead to the first $ 1 trillion pharmaceutical companies.
“Perhaps in the future we’ll be talking about Eli Lilly and Novo Nordisk as the world’s first trillion-dollar health care companies,” Gemma Game, head of health care sector strategy for Norway’s sovereign wealth fund, said at a press conference last week.
Growing competition
Several pharma companies are now racing to introduce new drugs to get in on the gold rush. In addition to Zealand Pharma, Regeneron, Amgen, and Viking Therapeutics are all developing weight loss drugs with hopes to erode the market share dominance held by Novo Nordisk and Eli Lilly.