The next star stock in the weight-loss drug market? A Danish pharmaceutical company's new drug successfully passed Phase II clinical trials, causing its stock price to surge by 36%.

The booming development of the weight-loss drug market has made many pharmaceutical companies profitable. Danish pharmaceutical company Zealand Pharma is also keeping up. The company announced on Monday that the results of a trial showed that one of its liver disease treatment drugs had good efficacy, leading to a 36% surge in the company's stock price on Monday.

In a statement on Monday, Zealand Pharma and its research partner Boehringer Ingelheim announced that the Phase II trial of their drug survodutide showed that 83% of adult participants responded positively to the drug's treatment of metabolic dysfunction-related non-alcoholic steatohepatitis (NASH), compared to only 18.2% improvement in the comparable placebo group.

It is understood that survodutide works by mimicking GLP-1 (glucagon-like peptide-1) intestinal hormones to suppress appetite, similar to other injectable weight-loss drugs, but it also mimics another intestinal hormone called glucagon.

The trial showed that the drug "demonstrated efficacy" in obese populations. Currently, five Phase III clinical trials are underway for overweight or obese populations. The drug has been designated by the U.S. Food and Drug Administration (FDA) as a fast-track development drug. Trial results indicate that the drug is safe even at the highest dose.

Previously, the success of various weight-loss drugs has caused a surge in stock prices for manufacturers. Novo Nordisk from Denmark, for example, became the highest-valued company in Europe due to the development of weight-loss drugs Ozempic and Wegovy. Analysts are also beginning to focus on the potential effectiveness of these drugs in obesity treatment. Zealand Pharma's stock price soared 36.45% in London on Monday. Currently, several other companies including Eli Lilly, Roche, and AstraZeneca are also seeking to compete in this field.

Carinne Brouillon, head of Boehringer Ingelheim's Human Pharmaceuticals Division, expressed hope that the drug will be launched in 2027 or 2028, depending on the favorable results of the Phase III trials. She added that the industry is researching blood tests and non-invasive imaging techniques to better diagnose early-stage NASH patients. The company stated that detailed trial information will be presented at a medical conference in the first half of this year.

Analysts in a report released on Monday stated that Zealand Pharma's trial results demonstrate a "clear victory" for survodutide. "Preliminary results show that various doses of survodutide in the trial have been effective in treating NASH, and the use of survodutide has not shown any unexpected safety or tolerability issues, even at higher doses of 6.0 milligrams." He added, "Importantly, the Phase 2 MASH trial also tells us that the 6mg dose is safe, which is the highest dose being used in the ongoing Phase 3 obesity trial."

Furthermore, analysts believe that Zealand Pharma's position as a key player in the next wave of the obesity treatment field is underestimated. Currently, the German pharmaceutical company Boehringer Ingelheim is sponsoring and conducting clinical development of survodutide. Analysts point out that Boehringer Ingelheim has announced that the drug will be pushed forward for the treatment of liver diseases and related conditions as quickly as possible, which is crucial.

MASH hepatitis, previously known as non-alcoholic steatohepatitis, is caused by the accumulation of diet-related fats in the liver, leading to inflammation, and may eventually result in cirrhosis. Data shows that an estimated 115 million people worldwide suffer from MASH hepatitis, with some patients requiring organ transplants.

Although there are currently no available treatments, several other drug manufacturers have included the treatment of this disease as an additional use for new obesity drugs. Novo Nordisk, a pioneer in weight-loss medications, is conducting Phase 3 trials for its Wegovy weight-loss injection's active ingredient semaglutide for MASH hepatitis.

Meanwhile, Eli Lilly's weight-loss drug Mounjaro (also known as Zepbound) is also testing the active ingredient of the drug in a Phase 2 trial for MASH hepatitis. The drug has a dual mechanism of action based on the hormones GLP-1 and GIP (gastric inhibitory peptide), which can promote insulin release to lower blood sugar levels and affect appetite and energy expenditure, thereby aiding in weight management.