Pfizer's Next Weight-Loss Weapon: How Berobenatide Stacks Up Against Novo Nordisk's Wegovy and Eli Lilly's Zepbound

The past few years have been rough on Pfizer (NYSE: PFE). The company has generally posted subpar financial results due to weakness within its coronavirus franchise, which once helped it become the first biopharmaceutical company to achieve $100 billion in annual sales. The drugmaker is looking to turn things around by developing potential blockbuster products, and one of its most promising candidates is berobenatide, an investigational weight loss therapy. The anti-obesity market is growing rapidly and could be worth $190 billion by 2035, compared to just $79 billion last year, according to some estimates. Could Pfizer's berobenatide help the company capitalize on this large opportunity?

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Challenging the giants

Pfizer will have to compete against the leaders in the weight-loss market, Eli Lilly, whose Zepbound is the best-selling drug in this niche, and Novo Nordisk, a pioneer in the market and the company behind Wegovy, perhaps the best-known brand in the field. How does berobenatide compare to Wegovy and Zepbound? It's hard to say without head-to-head clinical trials, but the data we do have so far suggest that Pfizer's candidate could be highly competitive.

In a phase 2b study, berobenatide achieved a weight loss of almost 16% (non-placebo-adjusted) in 32 weeks, with no plateau observed. Those are strong results, considering that Zepbound posted a weight loss of 20.2%, versus Wegovy's 13.7%, in a 72-week head-to-head study. If berobenatide can extend its results in phase 3 studies, we could be looking at the next billion-dollar weight loss drug.

The case for Pfizer

Berobenatide has another advantage: It could be administered monthly. So, even with slightly lower efficacy than weekly anti-obesity medicines, it may attract a large patient population. Further, the medicine's safety and tolerability profile appears strong. Pfizer is planning to run various phase 3 studies for this candidate across weight management and obesity-related comorbidities, including such potential indications as obstructive sleep apnea and knee osteoarthritis. This is clearly a highly promising product, and it seems the market has yet to factor its potential into Pfizer's share price.

The stock has basically moved sideways since November, when Pfizer acquired Metsera, the biotech company that originally developed berobenatide. It's also worth noting that Pfizer has plenty of other attractive candidates, especially in oncology. Also, even though its financial results haven't been strong, some of the company's products should perform well over the medium term. The list includes Padcev, a cancer medicine. Then there is Pfizer's strong dividend program. The company regularly increases its payouts and currently offers a juicy forward yield of 6.7%. All of those are great reasons to consider the stock.

Beware of these risks

However, there are also significant risks to consider. There is, of course, the possibility that berobenatide will not perform as well as expected in phase 3 studies that test investigational drugs in broader, more representative patient populations using more rigorous endpoints. Even beyond that, we should expect many other pharmaceutical leaders to make headway in this field over the next couple of years.

For instance, Amgen (NASDAQ: AMGN) is also working on a weight loss candidate that could be administered monthly (or less frequently). As more weight loss drugs enter the market, it will become harder for newer medicines to earn approval (regulators will have higher standards), and it may put downward pressure on the prices of these drugs, making them less commercially viable. None of that means Pfizer's berobenatide won't be successful, but it's important to consider this before deciding to buy the company's shares.

Similar risks apply to Pfizer's efforts in oncology and other fields. That's all before we account for the company's upcoming patent cliffs, including that of Eliquis -- one of its best-selling drugs -- by the end of the decade. Can Pfizer overcome these potential challenges? My view is that it is well-positioned to do so, given the breadth of its pipeline across weight management, oncology, and other areas, which gives it multiple opportunities to hit the mark.

Within five years, we could be looking at a transformed lineup of approved drugs that will help replace the company's weakening coronavirus business and the patent cliffs it will soon experience. The stock appears attractive to investors willing to be patient and stay put despite the challenges Pfizer faces.

Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool has positions in and recommends Amgen, Eli Lilly, Novo Nordisk, and Pfizer. The Motley Fool has a disclosure policy.