Zealand Pharma Halts Development of Dual GLP-1/GLP-2 Agonist Amid Competitive Obesity Treatment Landscape

Zealand Pharma has announced the suspension of development for its dual GLP-1/GLP-2 agonist, dapiglutide, citing an increasingly crowded metabolic development scene. The decision comes as part of a strategic move to focus resources on programs with greater potential for clinical differentiation and long-term value creation.

Dapiglutide's Journey and Clinical Performance

Dapiglutide, previously in phase 1 development for obesity-related comorbidities driven by low-grade inflammation, showed promise in early-stage trials. In a phase 1b study, the drug demonstrated an average weight reduction of 11.6% among participants. Despite these results, Zealand Pharma has decided to pause further development, a shift from their earlier plans to initiate a phase 2 study in the second half of 2025.

The decision to halt dapiglutide's development was influenced by several factors:

• The 11.6% average weight loss fell slightly short of the 12%-plus threshold that Jefferies analysts had deemed encouraging.
• William Blair analysts noted that the study's participant demographics, with over 90% male subjects, might have underrepresented the drug's weight loss potential, as women typically experience greater weight reduction.
• The increasingly competitive landscape for GLP-1-based therapeutics has raised the bar for clinical differentiation, particularly for treatments expected to launch in the 2030s and beyond.

Strategic Refocus and Pipeline Priorities

Zealand Pharma's chief medical officer, David Kendall, M.D., explained that the decision to pause dapiglutide's development followed a "disciplined portfolio review." The company aims to concentrate its obesity portfolio investments on programs with the highest potential for clinical differentiation and long-term patient benefit.

Despite shelving dapiglutide, Zealand Pharma maintains a robust pipeline in the metabolic space:

1. Petrelintide: An amylin analogue partnered with Roche, currently in phase 2 trials for obesity.
2. Survodutide: A glucagon/GLP-1 receptor dual agonist in phase 3 testing, developed in collaboration with Boehringer Ingelheim.
3. Early-stage pipeline assets targeting obesity and inflammation through novel mechanisms.

Industry Landscape and Competitive Pressures

The decision to pause dapiglutide's development reflects broader trends in the pharmaceutical industry, particularly in the obesity treatment sector:

• Novo Nordisk and Eli Lilly have set a high commercial bar for GLP-1 drugs in weight loss and related conditions.
• An obesity development rush has ensued, involving both small biotechs and major pharmaceutical companies.
• The intensifying competition has led several prominent players to reevaluate or diversify their efforts in recent months.

Notable industry movements include:

• Roche's $2.7 billion acquisition of Carmot Therapeutics and subsequent $1.6 billion upfront payment to co-develop Zealand's petrelintide.
• Pfizer's recent $10 billion deal to acquire obesity biotech Metsera, following a bidding war with Novo Nordisk.
• Pfizer's earlier decision to discontinue its experimental GLP-1 agonists, leaving a gap in its potential obesity treatment portfolio.

As the obesity treatment landscape continues to evolve, pharmaceutical companies are strategically positioning themselves to compete in this lucrative market, with a focus on differentiation and long-term value creation.