Pfizer's Weight Loss Drug Halted

Pfizer Inc. shares fell after halting the development of an oral weight loss drug due to safety concerns, causing investor worry about a competing therapy. The decision was based on elevated levels of liver enzymes found in mid-stage studies, although no patients reported liver side effects.

First Development and Market Analysis

Pfizer's shares dropped 5.6% in New York, their biggest decline since Feb 2022. Struggling to recover from waning Covid vaccine demand, Pfizer aims to catch up with Novo Nordisk and Eli Lilly in the $100B+ obesity-treatment market. Their hopes lie with danuglipron, a new treatment in development, set to compete with Novo's Wegovy and Lilly's Mounjaro.

Concerns About Competitiveness

Lilly and Novo are working on oral obesity drugs, offering a convenient alternative to injections. Analysts worry about danuglipron's twice-daily dosage affecting its competitiveness. Bloomberg Intelligence experts question Pfizer's optimistic $10 billion sales estimate for danuglipron, citing challenges with the pill's frequency.

Comparison with Competing Drugs

Lotiglipron, the discontinued drug by Pfizer, offered convenient once-daily oral treatment. Pfizer's choice to discontinue it was influenced by the emergence of favorable data regarding a competing experimental treatment from Lilly called orforglipron, which follows the same once-daily administration. On the other hand, Pfizer is currently conducting mid-stage studies on their twice-daily version of danuglipron, with no reported cases of elevated liver enzymes among the 1,400+ patients participating in the trials.

William Sessa, Pfizer's SVP and Chief Scientific Officer for Internal Medicine Research, announced the development of two treatments, aiming to choose one for further progress. Pfizer plans to finalize late-stage development plans for danuglipron by end-2023 and is also working on a modified release version for daily use.

Timeframe and Comparison to Competitor

According to JPMorgan analysts led by Chris Schott, Pfizer's once-a-day version of danuglipron is expected to require additional development time, while Lilly has progressed its daily drug to late-stage trials. This analysis suggests a potential disadvantage for Pfizer's drug in terms of market readiness and competition.