Pfizer stock toppled Monday after the company tossed out a potential diabetes and weight-loss drug that leads to elevated liver enzymes.
That drug, dubbed lotiglipron, was a once-daily pill for patients with type 2 diabetes. It belonged to the much-hyped GLP-1 drug class, alongside injectable competitors Ozempic and Mounjaro. Now, Pfizer says it's moving ahead with a twice-daily GLP-1 pill, dubbed danuglipron.
"This is a big setback for Pfizer — not just on the overall GLP-1 effort — but also from broader pipeline perspective," Evercore ISI analyst Umer Raffat said in a note to clients. "Sure, they'll move forward with danuglipron, but it's not the best shot they had."
On the stock market today, Pfizer stock tumbled 3.7% to 36.89. Shares of Novo Nordisk and Eli Lilly, makers of other diabetes and weight-loss drugs, fell a respective 1.2% and 1.3%.
Pfizer Stock: Coming From Behind
Analysts say the GLP-1 drug class could be huge. Now, Pfizer is coming from behind with a twice-daily pill that it hopes will take on Novo's Ozempic and Rybelsus and Lilly's Mounjaro.
Rybelsus is also a pill, but commercial uptake for oral GLP-1 drugs has been somewhat slow. Pills must be taken with specific timing in relation to food and water to ensure they absorb properly. But analysts say they could offer an easier route for needle-phobic patients.
For Pfizer, the decision to move forward with twice-daily danuglipron vs. once-daily pill lotiglipron is a "huge commercial disadvantage," Evercore's Raffat said. Pfizer had been waiting on midstage results for the once-daily pill before deciding which to send into Phase 3 testing.
Though the company has pointed out it has a different danuglipron formula that could reach the once-daily mark, Pfizer will still have to run testing on it. So, if danuglipron goes to market, it will first be as a twice-a-day pill, Raffat said. He kept his outperform rating on Pfizer stock.
Weight-Loss Drugs And Side Effects
Raffat notes danuglipron isn't a slouch when it comes to weight loss. Pfizer is testing it as a treatment for diabetes and as a potential weight-loss drug.
In patients with type 2 diabetes, danuglipron recipients lost more than 9 pounds over 16 weeks. Higher doses could lead to more weight loss. So far, the drug appears safe. The most common side effects line up with other GLP-1 drugs, including nausea, vomiting and diarrhea.
But whether patients can tolerate the treatment remains a big question.
"Tolerability profile needs work," Raffat said. However, doctors increased the dosage quickly in type 2 diabetes patients.
Pfizer will slow that down in the study of danuglipron as a weight-loss drug. He notes Pfizer stock investors will likely be closely watching to see if danuglipron has any impact on liver enzymes.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
