What happened
Pfizer (PFE 1.87%) is having a rough session in early trading Monday. Specifically, the drugmaker's shares were down by 5.5% on heavy volume as of 10:24 a.m. ET Monday morning.
The big dip came after the company announced that it was discontinuing the development of the type 2 diabetes and obesity candidate lotiglipron over safety concerns. Lotiglipron belongs to a class of medications known as glucagon-like peptide-1 receptor agonists, or GLP-1 RAs for short.
So what
The drug was being developed as a potentially safer and more effective alternative to the commercially available GLP-1 RAs from Eli Lilly (tirzepatide) and Novo Nordisk (semaglutide) in the weight loss setting. However, Pfizer halted the drug's clinical program after patients in a phase 1 study exhibited elevated liver enzyme levels.
NYSE: PFE
Key Data Points
Pfizer's market cap took a nearly $12 billion hit on this singular clinical discontinuation. That fact speaks volumes about the market's exceptionally high expectations for this novel class of medications in the treatment of obesity. Driving this point home, Wall Street analysts think tirzepatide and semaglutide will become two of the world's best-selling pharma products by the end of the decade, thanks to their utility in weight loss.
Now what
Pfizer's latest clinical update wasn't all bad news, however. The drugmaker said it plans on moving forward with its mid-stage weight loss candidate danuglipron. Pfizer expects to finalize plans for the drug's late-stage trial by year-end. Hence, there is still a chance that the pharma giant may land a top-tier obesity care product.
