Which company is the leader in the burgeoning weight loss drug market? A recent poll found that among the largest drugmakers, Pfizer (PFE 0.81%) is the one Americans associate most with this therapeutic area.
That's a surprising finding: Pfizer does not have a single anti-obesity medicine on the market and clearly trails Novo Nordisk (NVO +1.37%), the company behind Wegovy, in this field. However, Pfizer is trying to catch up; it recently announced it would advance one of its leading weight loss candidates to pivotal studies.
Encouraging phase 2 results
Pfizer has several anti-obesity candidates in the pipeline. One of the most advanced is danuglipron, an oral GLP-1 medicine. Note that Wegovy, also a GLP-1 drug, is administered subcutaneously once a week. Pfizer is investigating danuglipron as a twice-daily and once-daily pill, as some patients will prefer an oral formulation over subcutaneous injections.
Beyond that, danuglipron has produced encouraging phase 2 efficacy data. In a study that enrolled 411 people with type 2 diabetes (T2D), danuglipron decreased patients' blood sugar levels and weights at all dose levels, with the highest doses leading to the most significant declines.
NYSE: PFE
Key Data Points
While it's hard to compare the performance of medicines from separate clinical trials, it's worth pointing out how semaglutide (the active ingredient in Wegovy) performed in somewhat similar studies. A phase 3a trial for semaglutide, which enrolled 388 T2D patients at different doses of the medicine (or a placebo), led to a decrease in body weight of 4.5 kg for the highest dose of the drug used in the study, which lasted 30 weeks.
By comparison, the highest dose of danuglipron administered twice daily showed a 4.2 kg decrease in body weight in patients in just 16 weeks.Does this mean danuglipron is more effective than semaglutide? Not necessarily. However, these results should make Pfizer and its shareholders cautiously optimistic.
What this means for investors
According to some estimates, the anti-obesity market could be worth $100 billion by 2030. In 2022, it was valued at just $2.5 billion. If that's hard to believe, consider that Wegovy and its main competitor, Eli Lilly's Zepbound, have been flying off the shelves. Both have faced shortages as patients race to acquire them. There's a massive opportunity here for other pharmaceutical companies, including Pfizer.
That said, danuglipron still has a long way to go before it hits the market. And at this point, there's no guarantee it will. It's very likely that clinical issues could surface in a phase 3 study. Even if none do, perhaps danuglipron won't prove that effective in pivotal trials.
If Pfizer were entirely relying on its weight loss programs to drive growth, the stock wouldn't be worth a second look, considering that its work in this area has yet to produce the results investors want. Thankfully, there's much more to the company. Despite declining revenue from coronavirus-related sales, Pfizer's lineup and pipeline have been transformed in recent years.
The company earned seven brand-new approvals in 2023, more than twice as many as any of its peers. Partly thanks to acquisitions, it now boasts an incredibly vast pipeline, including oncology therapies.
If you exclude its COVID-19 portfolio, Pfizer's revenue is growing at a good clip. In the first quarter, sales of products other than Comirnaty and Paxlovid were up by 11% year over year. As the company's newer products gain traction, while coronavirus-related ones fade into irrelevance, expect good things from Pfizer.
That's not to mention the company's strong dividend program. Pfizer's work in the anti-obesity area is promising and arguably makes the stock slightly more attractive. However, there are other (and better) reasons to invest in the company right now.
