Novo Nordisk and Eli Lilly rival soars 35% after promising weight loss drug results

Shares of Denmark's Zealand Pharma rocketed higher, after the company posted strong results from a trial of a liver disease treatment that has been touted as a potential competitor in the booming weight loss drug market.

The Phase 2 trial of the survodutide drug showed 83% of adults saw positive results for a form of liver inflammation caused by excess fat cells known as "MASH," the company said in an announcement Monday.

The drug has "demonstrated efficacy" in people with obesity and is currently undergoing five Phase 3 trials in a clinical program for people who are overweight or obese. It has received a fast-track designation from the U.S. Food and Drug Administration.

Analysts latched onto the drug's possible efficacity in obesity research after the latest test results, which indicated the safety of the top dosage used in that trial.

Shares of Zealand Pharma provisionally closed 35% higher on Monday, amid enthusiasm for the company's potential in the highly lucrative obesity market that propelledfellow Danish drugmaker Novo Nordisk to become Europe's most valuable firm on its development of Ozempic and Wegovy.

Several other companies, including Eli Lilly, Roche and AstraZeneca, also seek to compete in the sector.

"Top-line results demonstrated an improvement in MASH, at all doses explored in the trial. Treatment with survodutide did not show unexpected safety or tolerability issues, including at the higher dose of 6.0 mg," Michael Novod, head of bank Nordea's health-care equity research team, said in a Monday note, hailing the latest Zealand Pharmaresults as an "unequivocal win for survodutide." 

"Importantly, the [Phase 2] MASH trial also tells us that the 6mg dose is safe, which is the top dose used in the ongoing [Phase