Zealand Pharma shares plunged Friday after an obesity drug candidate developed with Roche delivered underwhelming mid-stage results. Despite meeting primary targets with side-effects similar to placebo, the drug disappointed investors. Roche licensed petrelintide from Zealand for up to $5.3bn - one of the sector's largest deals - and the setback cost billions in market value.

The competition in obesity treatments intensifies as Novo Nordisk and Eli Lilly dominate with drugs delivering up to 25% weight reduction. Roche shares fell more than 3% in Zurich trading following the announcement. Barclays analysts described the data as "disappointing" because it fell short of the 13% weight reduction needed to be competitive in this growing market.

While petrelintide, based on the amylin hormone that creates fullness, showed promise with fewer side effects than GLP-1 competitors, its efficacy trails market leaders. The drug won't reach patients until 2029 at earliest, assuming successful trials and approval. This setback underscores the challenges companies face when competing against established players in the lucrative weight-loss treatment sector.