Zealand Pharma (ZEAL) Stock Drops 25% After Obesity Drug Trial Shows High Drop-Out Rate

TLDR

• Zealand Pharma fell roughly 25% after Phase III trial data for survodutide showed high patient discontinuation rates
• Around 23–25% of patients on survodutide stopped treatment due to gastrointestinal side effects, vs. 5.4% on placebo
• Despite the tolerability issues, the drug showed weight loss of up to 16.6% vs. 3.2% for placebo
• Goldman Sachs warned the low tolerability is likely to limit the drug’s uptake in the obesity market
• Wolfe Research kept its “outperform” rating with a DKK750 price target, implying over 129% upside from pre-drop levels

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Zealand Pharma (ZEAL) lost around a quarter of its market value on Monday after Phase III trial data for survodutide, its obesity drug partnered with Boehringer Ingelheim, revealed that roughly one in four patients stopped taking the drug due to side effects.

Zealand Pharma A/S, ZEAL

The stock fell approximately 25% in Copenhagen trading. Novo Nordisk, Zealand’s larger rival in the obesity space, also slipped around 2% on the day.

The SYNCHRONIZE-1 trial ran for 76 weeks across 725 adults with obesity or overweight without Type 2 diabetes. Weight loss reached up to 16.6% on the efficacy estimand versus 3.2% for placebo — a strong result on paper.

But the tolerability data told a different story.

Discontinuation rates hit 23.7% and 24.8% on the 3.6mg and 6mg doses respectively, compared to just 5.4% on placebo. The main culprit: gastrointestinal events, which drove 17.8% and 20.2% of drop-outs on each dose versus 2.9% on placebo.

Goldman Sachs flagged the numbers directly, saying the low tolerability is likely to limit how widely survodutide gets used in the obesity market.

Wolfe Research noted another complication. About 16.5% of patients on the placebo arm used a prohibited GLP-1 receptor agonist during the trial, which lifted placebo-arm weight loss and compressed the apparent treatment benefit.

The broker also pointed to how the trial’s rigid design contributed to the high discontinuation numbers, citing comments from investigators about the tension between running a rigid versus flexible study.

Strong Efficacy Data Offers Some Comfort

Despite the side effect concerns, the efficacy picture had real highlights.

A body composition sub-study using MRI in 75 patients showed survodutide 6mg produced a 34% relative reduction in visceral fat versus 11.8% for placebo. Liver fat dropped 63.1% versus 24.5% for placebo, and lean mass made up no more than 10.8% of total tissue mass change at the highest dose.

The separate SYNCHRONIZE-MASLD trial, run over 48 weeks in 218 adults with obesity and metabolic liver disease, also delivered. Up to 84.2% of survodutide patients hit at least a 30% relative liver fat reduction, compared to 24.3% on placebo. Body weight fell 12.2% versus 1% on placebo.

What’s Still on the Table for Zealand

Zealand Pharma is eligible for high single- to low double-digit royalties on global survodutide sales, plus €315 million in potential outstanding milestone payments. Boehringer Ingelheim holds full responsibility for development and commercialization.

Wolfe Research kept its “outperform” rating with a DKK750 price target — implying roughly 130% upside from the pre-drop close.

Meanwhile, Novo Nordisk reported that prescriptions for its Wegovy weight-loss pill have passed three million since the pill launched in early January.