Struggling to recover from waning coronavirus vaccine demand, Pfizer is racing to catch up with Novo Nordisk and Eli Lilly in an obesity-treatment market. Bloomberg photo by Stephanie Keith

Pfizer shares fell after the company halted early development of an oral drug for weight loss on safety concerns, raising investor anxiety about an alternative therapy the company is still developing.

The drugmaker will stop work on lotiglipron based on data from phase 1 clinical trials and lab measurements showing elevated levels of enzymes in an ongoing mid-stage study, according to a statement Monday. The enzymes, called transaminases, play a key role in liver function. None of the patients reported liver side effects or symptoms, Pfizer said.

The shares fell as much as 5.6% at 10:51 a.m. in New York, their biggest intraday drop since February, 2022.

Struggling to recover from waning coronavirus vaccine demand, Pfizer is racing to catch up with Novo Nordisk and Eli Lilly in an obesity-treatment market estimated to grow to more than $100 billion in the coming years. Pfizer is pinning its hopes on danuglipron, another treatment still in development, to compete with the likes of Novo’s Wegovy and Lilly’s Mounjaro, both seen as blockbuster market leaders.

Lilly and Novo are also developing oral obesity drugs that would save patients the trouble of self-injecting them. Analysts raised concern that the need for patients to take danuglipron twice a day could hurt its competitiveness.

“A twice-daily pill could prove challenging, assuming all else is equal, leaving Pfizer’s $10 billion peak-sales estimate for danuglipron looking optimistic,” Bloomberg Intelligence analysts John Murphy and Mila Bankovskaia said in a note. Pfizer said it sticks by the estimate of peak sales.

Lotiglipron is a once-daily oral treatment, and Pfizer’s decision follows positive data from a competing experimental treatment from Lilly, orforglipron, according to the Bloomberg analysts. The twice-daily version of danuglipron is in mid-stage studies, and Pfizer said it hasn’t seen the same elevated enzymes in more than 1,400 patients enrolled in tests. It will continue to monitor patients for the enzymes, a spokesperson said in an email.

The company was developing two treatments with the intent of choosing one to move forward with, said William Sessa, senior vice president and chief scientific officer for internal medicine research, in the company’s statement. Pfizer expects to finalize plans for danuglipron’s late-stage development by the end of 2023 and is working on a once-daily, modified release version.

Pfizer’s once-a-day version of danuglipron will likely take time to develop, while Lilly has moved its daily drug to late-stage trials, JPMorgan analysts led by Chris Schott wrote in a note.

Bloomberg’s Emma Court contributed to this report.