Viking Therapeutics stock rocketed Monday after Pfizer scrapped development of its daily weight-loss pill, danuglipron, after one patient experienced a potential drug-induced liver injury.
This is the second big setback for danuglipron and the third for Pfizer's obesity treatment efforts. William Blair analyst Andy Hsieh says it could be a boon for Viking, which has shed roughly 66% over the last six months amid emerging competition and the deteriorating macro.
Investors are closely watching Viking Therapeutics as a potential takeover target with its experimental weight-loss drug, VK2735.
"VK2735 could offer Pfizer a rare opportunity to reestablish not only a mere presence in obesity, but also a leading position beyond the current Novo Nordisk-Eli Lilly duopoly," Hsieh said in a report. "Notably, VK2735 is on track to initiate Phase III studies in the next two to three months, following the release of competitive 13-week weight loss results, coupled with (a) promising tolerability profile."
Leerink Partners analyst Thomas Smith said Pfizer's "stumble" could open up strategic optionality for Viking and VK2735. Viking Therapeutics is developing it as a weight-loss shot and pill.
Viking Therapeutics stock rallied 10.6%, closing at 24.57, while Pfizer stock traded up 1% at 22.12. Other names in the weight-loss space trended higher with Novo shares rising 2.1% to 66.06 and Lilly gaining 3%, ending the regular session at 745.35.
Pfizer's History Of Obesity Setbacks
This isn't the first time a liver injury has thrown a wrench into Pfizer's obesity treatment plans.
Last year, the S&P 500 company dumped a twice-daily formulation of danuglipron in favor of the once-a-day pill. The year before, Pfizer stopped development of another GLP-1 pill called lotiglipron after patients experienced elevated liver enzymes.
Pfizer says the liver injury has since resolved and the overall frequency of elevations in liver enzymes across 1,400 patients has been in line with approved drugs in the same class.
"Cardiovascular and metabolic diseases including obesity remain important areas of unmet medical need, and we plan to continue applying our global capabilities to advance a pipeline of investigational treatments that have the potential to fill critical gaps in patient care," Chief Scientific Officer Chris Boshoff said in a written statement.
The company says danuglipron delivered a competitive effectiveness and tolerability profile in final-phase testing.
But "after a review of the totality of information including all clinical data generated to date for danuglipron and recent input from regulators, Pfizer has decided to discontinue development of the molecule," the company said.
Another Weight-Loss Pill In Testing
Pfizer is still testing a daily pill called PF-07976016. Unlike danuglipron, PF-07976016 doesn't mimic the GLP-1 hormone. Instead, it blocks the action of the GIP receptor, or GIPR. This is a unique approach for a weight-loss drug.
Lilly's approved drug, Zepbound, and Viking's VK2735 both mimic the GLP-1 and GIPR hormones. Amgen's MariTide mimics GLP-1 and blocks GIPR. MariTide is in testing as a monthly shot.
As of Feb. 4, PF-07976016 was in Phase 2 testing.
Pfizer is also testing a third pill that mimics GLP-1. The company wrapped Phase 1 testing late last year.
"We note that if it was derived from the danuglipron backbone, it may also carry liver risks," Leerink Partners analyst David Risinger said in a report.
Evercore ISI analyst Umer Raffat offered a similar view. Pfizer's danuglipron and lotiglipron shared a similar drug scaffold, while Lilly's pill, orforglipron, uses a different scaffold. Patients who've received orforglipron have also experienced elevated liver enzymes up to 10 times normal levels.
"But, to be clear, that's nothing like 'drug induced liver injury' — which has a specific bar," he said in a client note.
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