PFE.US's “weight loss drug ambition” shattered: Danuglipron development terminated due to patient liver damage

The Zhitong Finance App learned that Pfizer (PFE.US) will stop developing Danuglipron, the much-publicized oral diet drug, because a patient participating in the clinical trial developed potential drug-induced liver damage. So instead of advancing this once-a-day medication to the final testing phase, the company will invest in early-stage obesity treatments.

As demand for COVID-19 vaccines and treatments has declined, Pfizer has made entering the novel diet drug market the core of its recovery plan for the post-pandemic era. The diet pills market is booming and is expected to reach $130 billion by 2030.

Investors originally hoped Danuglipron would compete with major weight loss drugs such as LLY.US (LLY.US)'s Zepbound and Novo Nordisk (NVO.US)'s Wegovy.

Pfizer has lagged behind its competitors in developing weight loss drugs. After receiving US approval in 2023, Eli Lilly's Zepbound quickly reached annual sales of nearly $5 billion. The company also has an oral diet drug currently in the final stages of development. AstraZeneca (AZN.US) and Schudi Biotech (GPCR.US) are also developing oral weight loss pills.

Previously, Pfizer was forced to stop developing Danuglipron, which was taken twice a day, due to the high incidence of nausea and vomiting, which led to patients withdrawing from a mid-term study involving about 1,400 people. A few months ago, the company also dropped another oral weight loss drug, which showed worrying liver effects in clinical trials.

Pfizer's decision may be a relief for some investors, who have been wondering if Danuglipron can compete effectively with other diet pills. The cessation of development of Danuglipron may also prompt Pfizer to seek an acquisition deal.

In any case, this development will increase pressure on Pfizer CEO Albert Bourla, who has stated many times that Pfizer's potential for future growth is underestimated. As key drugs lose patent protection, the company expects to lose approximately $15 billion in revenue by 2030.

Pfizer's series of multi-billion dollar acquisitions have yet to spawn a new blockbuster drug, and its internal product line has produced few exciting results. Since the peak of the pandemic in 2021, the company's stock price has fallen by more than 60%.

Before the US stock market on Monday, as of press release, Pfizer was down 0.23%, Lilly was up nearly 2%, and Novo Nordisk was up more than 3%.