Pfizer: Disappointing Clinical Data for Obesity Drug Leads to Minor Fair Value Estimate Cut

We are lowering our Pfizer fair value estimate to $47 per share from $48 based on the disappointing phase 2 obesity study with danuglipron. We believe the unfavorable side effect profile (up to 73% rate of nausea) shown in the study would make the drug less competitive. While Pfizer is still evaluating the drug by formulating the dosing for once daily instead of twice daily, it will not move the drug forward into phase 3 development at the twice-daily dose. Given the setback, we believe the probability of success for the drug is lower, and we have significantly lowered our assumed peak annual sales potential from over $3 billion to less than $1 billion.