Wolfe Research has reduced its rating on Zealand Pharma to Peer Perform from Outperform and withdrawn its price target, citing troubling tolerability data for the company’s obesity compound survodutide that were presented at the American Diabetes Association conference.
The brokerage originally began coverage on Zealand in late March with an Outperform view, pointing to attractive deal economics and expected royalty streams from partnerships with Roche and Boehringer Ingelheim. Those partnerships remain intact, but the recent clinical readout has prompted a reassessment of commercial prospects.
Survodutide, a GLP-1/glucagon agonist being developed in collaboration with Boehringer Ingelheim, produced 13% mean weight loss on the treatment-regimen estimand at week 76 in the SYNCHRONIZE-1 study. While the magnitude of weight reduction attracted attention, analysts focused on the regimen’s tolerability.
In SYNCHRONIZE-1, 24.2% of patients stopped treatment because of adverse events. Wolfe contrasted that with discontinuation rates reported in other phase 3 programs: 6% for Eli Lilly’s Zepbound and 5% for Novo Nordisk’s Wegovy. Wolfe said the survivodutide data "paint a bleak picture for adherence, as well as initial prescriber uptake, in the real world."
Responding to the tolerability signal, Wolfe slashed its peak sales forecast for survodutide to $2.6 billion from $4.9 billion, a number that sits below the consensus estimate of $5 billion.
Not all of the company’s news at the ADA gathering was negative. Zealand’s other late-stage candidate, petrelintide - a long-acting amylin engineered with Roche - received favorable commentary on tolerability. At a symposium one discussant described petrelintide as a potential primary care choice because of what was characterized as a placebo-like tolerability profile.
In the phase 2 ZUPREME-1 trial, petrelintide generated up to 10.7% mean weight loss from baseline at week 42. Despite that result, Wolfe emphasized the program remains years away from pivotal data and commercial availability. The firm also flagged competitive pressure from Eli Lilly’s eloralintide, which has shown stronger weight-loss outcomes and has broad phase 3 development already underway.
Analyst Alexandria Hammond underscored the remaining work for petrelintide, saying: "While we think there’s a lot to like about petre, there’s still wood-to-chop, in our view, as we’re still years from pivotal results, which will need to replicate the phase 2 tolerability profile, and commercial launch."
Looking ahead, Zealand has further readouts on the horizon for survodutide. Upcoming data include SYNCHRONIZE-2, testing the drug in obesity and type 2 diabetes, and a cardiovascular outcomes trial, both expected this year. Additional liver disease results from the LIVERAGE program are slated for 2027. Hammond stated she sees little likelihood that any of these forthcoming results "to meaningfully shift the narrative."
The downgrade and the lower sales projection reflect Wolfe’s reassessment of how survivodutide’s tolerability could affect patient adherence and prescriber adoption, even as other programs in Zealand’s pipeline show promise but face timing and competitive hurdles.