Zealand Pharma stock rallies 20%: what happened?

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Zealand Pharma (CPH: ZEAL) rallied more than 20% this morning after reporting positive results from an early stage trial of its new weight loss treatment. 

The biotech firm is now trading at an all-time high. 

Why is it significant for Zealand Pharma stock?

Petrelintide – a long-acting amylin analog of Zealand Pharma showed significant efficacy in a 16-week trial, as per its press release on Friday.

Participants receiving high doses successfully lowered their body weight by 8.6% versus only 1.7% observed in the placebo group. Only one participant out of a total of 48 had to withdraw from the study due to adverse effects. 

Zealand Pharma also confirmed that petrelintide was observed to be “safe and well tolerated at all dose levels” which makes it suitable as an alternative to GLP-1 receptor agonist treatments for weight loss. 

Zealand Pharma stock has now more than doubled since the start of 2024. 

Is ZEAL in competition with Novo Nordisk?

Results reported today indicate potential for Zealand Pharma to eventually be in competition with more notable names like Novo Nordisk and Eli Lilly & Co – both of which have launched a widely popular GLP-1 drug for weight loss.

On Friday, David Kendall – the chief medical officer of ZEAL expressed confidence that petrelintide will “deliver weight loss comparable to GLP-1 receptor agonists with a better patient experience”. 

The Danish firm now plans on moving forward with a phase 2 clinical trial for petrelintide. 

Note that the biotech company is working on another weight loss treatment called survodutide as well in collaboration with Boehringer Ingelheim. Zealand Pharma stock does not currently pay a dividend. 

Watch here:

Is it too late to invest in Zealand Pharma shares?

Analysts at Jefferies agreed in a research note today that petrelintide could be promising and, in fact, a more tolerable alternative treatment to GLP-1s while potentially matching their weight loss efficacy. 

Zealand’s survodutide also showed positive results in a Phase 2 trial in February. 

The news arrives more than a month after the biotech firm reported DKK 15 million ($2.15 million) in revenue for its first financial quarter. Adam Steensberg – the chief executive of Zealand Pharma said at the time:

With our pipeline of wholly owned and differentiated obesity candidates, I am truly excited about the upcoming data read-outs for petrelintide and dapiglutide.

He also confirmed that his company has a solid cash runway until 2027.

Wall Street currently has a consensus “buy” rating on Zealand Pharma stock. Their average price target of DKK 829 suggests another 10% upside from here which indicates that it may still not be too late to invest in ZEAL.

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