Equities

Pfizer Tests Daily Pill, Targets $130B Obesity Market

Pfizer advances once-daily weight-loss pill to mid-stage trials, aiming for a share of the $130 billion market.

By Bill Bullington

7/11, 08:06 EDT
Eli Lilly and Company
Novo Nordisk A/S
Pfizer, Inc.
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Key Takeaway

  • Pfizer's shares rose 2.9% after announcing mid-stage trials for its once-daily weight-loss pill, danuglipron, targeting the $130 billion obesity market.
  • The company aims to compete with Novo Nordisk and Eli Lilly by offering a needle-free alternative to popular weight-loss injections like Wegovy and Zepbound.
  • Despite past challenges with nausea and liver safety concerns, Pfizer is optimistic about capturing a third of the obesity drug market.

Pfizer's Weight-Loss Pill Development

Pfizer Inc. is advancing its once-daily weight-loss pill, danuglipron, to mid-stage trials in the second half of this year. This move is part of Pfizer's strategy to enter the lucrative obesity medication market, which analysts predict will reach $130 billion by the end of the decade. The company aims to provide a needle-free alternative to popular weight-loss injections like Wegovy and Zepbound, produced by Novo Nordisk and Eli Lilly.

The compound used in Pfizer's pill is similar to those in the already-approved weight loss injections. Pfizer's shares rose 2.9% in early trading following the announcement. The company has high hopes for the pill, expecting it to eventually capture about a third of the obesity drug market. However, Pfizer has faced challenges in this area before. Late last year, it halted the development of a twice-daily version of danuglipron due to high rates of nausea and vomiting in a mid-stage study involving about 1,400 people. Additionally, another oral obesity drug was abandoned earlier due to concerning liver effects.

Competitive Landscape

Pfizer is entering a competitive field dominated by Novo Nordisk and Eli Lilly, both of which are already testing weight-loss pills in phase-three trials. Eli Lilly's weekly Zepbound shot has gained US approval and is poised for blockbuster sales. Other companies like AstraZeneca Plc and Structure Therapeutics Inc. are also developing oral obesity drugs.

Pfizer's once-daily version of danuglipron was studied in a small trial enrolling just 20 people, testing four doses to determine the most effective one. The company is focusing on this version after scrapping a separate once-daily pill due to liver safety concerns. Early study results supported the once-daily dosing, showing a safety profile consistent with prior twice-daily dosage studies, including no liver enzyme elevations in more than 1,400 healthy adult volunteers.

Financial Context

Pfizer is searching for new products to offset its post-pandemic decline. The company's sales fell 20% in the first quarter of 2024 as demand for its Covid-19 vaccine and pill plummeted. Pfizer's financial forecast for this year came in well below Wall Street's expectations, and its vaccine for RSV has underperformed. The daily anti-obesity pill is designed to mimic the effects of Novo Nordisk's blockbuster injectable semaglutide, sold as Wegovy and Ozempic.

The pharmaceutical giant is years behind its competitors in the obesity treatment market. Novo Nordisk and Eli Lilly are already testing their weight-loss pills in advanced stages, and Eli Lilly's Zepbound shot is expected to generate significant sales. Despite these challenges, Pfizer is optimistic about the potential of its once-daily pill to capture a significant share of the market.