Pfizer signals progress on obesity pill, boosting stock

By Ciara Linnane and Eleanor Laise

Oral versions of popular weight-loss drugs could be cheaper, more accessible, analysts say

Pfizer Inc.'s stock (PFE) rose 2.8% early Thursday, after the drug company said it has taken a step forward in developing a once-daily pill for obesity.

The pharmaceutical giant said it has chosen a preferred modified-release formulation of its experimental drug danuglipron, which like Novo Nordisk's (NVO) Ozempic and Wegovy, is a GLP-1 receptor agonist but is taken orally rather than injected.

Dosing studies of the modified-release danuglipron will be conducted in the second half of this year, Pfizer said.

Pfizer is one of several major drugmakers racing to develop obesity pills that could compete with injections such as Wegovy and Eli Lilly & Co.'s (LLY) Zepbound. Weight-loss pills may be cheaper and more accessible for patients, analysts say, amid ongoing shortages of some popular injectable medications. Other companies working on oral versions of weight-loss drugs include Eli Lilly, Structure Therapeutics Inc. (GPCR), and Gilead Sciences Inc. (GILD).

Pfizer's announcement Thursday signals progress after earlier setbacks with danuglipron. The company said late last year that it would not move to a late-stage trial of a twice-daily formulation of the drug after patients in an earlier trial experienced several side effects.

The once-daily pill news brings danuglipron "back from the near dead," BMO Capital Markets analyst Evan David Seigerman said in a research note Thursday. The "positive surprise could reignite Pfizer's momentum in the obesity space, which appeared challenged," Seigerman wrote. But more safety and tolerability data is still needed, he said, to size up danuglipron's potential.

"Obesity is a key therapeutic area for Pfizer, and the company has a robust pipeline of three clinical and several pre-clinical candidates," Mikael Dolsten, Pfizer's chief scientific officer and president of R&D, said in a statement Thursday.

Pfizer's stock is down 1.5% in the year to date, while the S&P 500 has gained 18%.

-Ciara Linnane -Eleanor Laise

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07-11-24 0838ET

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