Pfizer joins the weight-loss drug race again

Pfizer Inc (NYSE: PFE) is in focus today after announcing plans of proceeding with a once-a-day formulation of danuglipron - its weight-loss drug. 

Encouraging data from an ongoing early-stage study informed its decision to move forward with that variant of its obesity pill. 

Pfizer stock is currently trading slightly below its price at the start of 2024. 

What's next for Pfizer Inc in the obesity market?

Pfizer tested more than one formulation of its weight-loss drug and picked the one that had “the most favourable profile”. 

The New York listed firm will conduct trials in the back half of this year to discover the ideal dose of danuglipron. Mikael Dolsten - the chief scientific officer of Pfizer said in a press release today:

Dolsten recently announced plans of stepping down from that role at Pfizer. 

Why is PFE committed to the obesity market?

Analysts forecast market for the weight-loss drugs to be worth $100 billion by the end of this decade. According to Mikael Dolsten who also serves as the president of Pfizer’s R&D:

Still, investors are not convinced of PFE’s potential in weight-loss drugs. That’s because the company’s twice-daily formulation of danuglipron did not prove to be well-tolerated in a mid-stage study. 

Pfizer scrapped plans of developing another once-daily obesity pill in June of 2023 as well. 

Is Pfizer stock worth buying in July?

Pfizer stock has not been exciting over the past twelve months due to a rapid slowdown in its COVID business.

Still, the pharmaceutical giant reported its financial results for the first quarter in early May that topped Street estimates. Dr. Albert Bourla - the chief executive of PFE said at the time:

Pfizer also raised its guidance for the full year in May. But that wasn’t enough for Chris Schott of JPMorgan to turn any more bullish on Pfizer stock. The analyst reiterated PFE at “hold” this week. His $30 price target does not suggest a meaningful upside from here. 

On the plus side, however, Pfizer stock pays a dividend yield of a rather lucrative 5.93% at writing.