Pfizer: Solid Midstage Danuglipron Data in Diabetes and Weight Loss Supports Continued Development

Pfizer published solid and detailed phase 2 data on diabetes and weight loss drug danuglipron largely in line with our expectations. We don’t expect any major changes to our fair value estimate or moat rating based on the data. If a larger phase 3 program continues to support a robust efficacy impact, we would likely increase Pfizer’s fair value estimate. Nevertheless, the data is a reminder that Pfizer has the potential to launch competitive drugs into a class that is currently dominated by Novo Nordisk and Eli Lilly. We believe Pfizer’s potential in this class is likely underappreciated and could be disruptive if it posts strong phase 3 data.