On Thursday, Pfizer reported long-awaited results from a 20-person study of an anti-obesity pill that previously ran into trouble because of side effects. In the new study, Pfizer tested four versions of the treatment as a once-daily pill instead of twice-daily, with the aim of finding one that generates sufficient weight loss without the side effects that caused people to stop taking it. 

Pfizer didn’t give details about which was the best formulation of the drug, making it hard for analysts to judge the findings. The drugmaker’s departing Chief Scientific Officer Mikael Dolsten said there were “encouraging” results for several versions of the drug and that “we believe a once-daily formulation has the potential to have a competitive profile” in the obesity pill market. The company didn’t immediately respond when asked if more data about the medication, known as danuglipron, was going to be released from this study.

Pfizer’s shares rose as much as 3.1%. 

Initial reaction from analysts was muted. “Some of the most meaningful questions around danuglipron still have not been answered,” Jefferies analyst Akash Tewari said in a note to investors.

Evercore analyst Umer Raffat said he thinks Pfizer is “likely buying some time” to see how a different obesity pill it’s studying performs.

Pfizer said it tested four formulations of the drug to determine which might be most effective, but didn’t disclose which worked best, just saying one showed “the most favorable profile.” 

“Candidly, today’s trial never answered the question on what once-daily modified release dose would get to competitive efficacy,” Raffat said in a note to investors. “In that backdrop, the judicious thing to do was to not over-commit – and that’s exactly what they did: didn’t kill danuglipron, said it’s alive and may move forward.”

Pfizer said they’ll move the pill to a mid-stage study in the second half of this year. Some analysts had thought that Pfizer, racing to close the gap with Lilly and Novo, might skip that step and move to a later-stage study in attempt to get regulatory approval sooner. The next trial will be designed to find an ideal dose of the pill, the company said, and the drug will move into the final stage of development if it succeeds.

Sam Fazeli, director of research at Bloomberg Intelligence, said in a best-case scenario that the drug could only be launched in 2028, “at which stage multiple competitors might be available.” 

Outpaced by rivals

Danuglipron was designed as a needle-free alternative to popular weight-loss shots from Novo Nordisk A/S and Eli Lilly & Co. Pfizer has said it expects pills to eventually capture about a third of the obesity drug market, which is predicted to grow to about $130 billion by the end of the decade. The pill is designed to mimic the effects of Novo’s blockbuster injectable semaglutide, sold as Wegovy and Ozempic. 

Pfizer has struggled to make headway in treating obesity. Late last year, the company halted development of a twice-daily version of danuglipron after high rates of nausea and vomiting led patients to drop out of a mid-stage study of about 1,400 people. Months earlier, it abandoned another oral obesity drug that showed concerning liver effects in a trial.

The company is years behind Novo and Lilly, whose weekly Zepbound shot is poised for blockbuster sales after gaining US approval last year. Lilly also has an obesity pill in the final stage of development with a key trial slated to end in April. AstraZeneca Plc, Structure Therapeutics Inc., and other companies are also developing oral drugs.

Investor pressure

If the pill is successful, it could ease some of the pressure on Pfizer Chief Executive Officer Albert Bourla, who has struggled to persuade investors that the company’s pipeline of medicines can arrest its post-pandemic decline. Sales fell 20% in the first quarter of 2024 as demand plummeted for its Covid-19 vaccine and pill. Pfizer’s financial forecast for this year came in well below Wall Street’s expectations and its vaccine for RSV has underperformed.

Pfizer just said its chief scientific officer Dolsten is leaving after 15 years, 14 of which he’s served in the company’s top research role. Under him, Pfizer developed blockbusters like Eliquis and Prevnar. But those products — along with many of the company’s top-sellers — are facing increasing competition and Pfizer has come up with little that might replace them.

The company had a brief reprieve during the pandemic when its Covid-19 vaccine and pill brought in more than $100 billion of sales in just two years. But that success was short-lived. The market for booster shots has dramatically declined, and Pfizer had to take doses of its pill back from the government last year because of low demand. These days its stock is trading near 10-year lows.

Wall Street has fixated on the obesity pill as a way for the company to revive itself, pressing Bourla for any hints that his company might one day compete in the era-defining market for obesity treatments. On Pfizer’s last quarterly earnings call, analysts brought it up four times in increasingly creative ways, with one pointing out a job listing on the company’s website looking for clinicians with experience in obesity.

Pfizer reports earnings later this month, giving analysts a chance to further probe the drugmaker on the results of the study released Thursday and its future in obesity.