Pfizer's Obesity Setback Sparks M&A Hopes in GLP-1 Race

Pfizer’s abrupt discontinuation of its experimental obesity drug danuglipron in April 2025—a result of a single case of elevated liver enzymes in a clinical trial—has sent shockwaves through the pharmaceutical sector. The move, which follows prior setbacks in obesity drug development, has reignited speculation about mergers and acquisitions (M&A) in the booming GLP-1 receptor agonist (GLP-1 RA) market. Analysts suggest Pfizer’s struggles could catalyze consolidation as rivals and smaller players position themselves to capture a share of a market projected to exceed $150 billion by the early 2030s.

The Pfizer Pipeline Collapse and Its Market Impact

Pfizer’s decision to halt danuglipron, its most advanced obesity candidate, marks the latest stumble in its bid to compete in the GLP-1 space dominated by Eli Lilly and Novo Nordisk. The company’s pipeline has faced repeated hurdles: a twice-daily formulation of danuglipron was abandoned in 2023 due to gastrointestinal side effects, while its earlier candidate lotiglipron was scrapped in 2022 after liver enzyme elevations. The April 2025 discontinuation, driven by a single asymptomatic liver injury case, further eroded confidence in its internal R&D efforts.

Pfizer’s shares fell 1.2% post-announcement, reflecting investor skepticism about its ability to regain ground. The company now relies on early-stage assets like PF-07976016, an oral GIP analog in Phase 2 trials, and a Phase 1 GLP-1 drug developed with Nxera Pharma. However, these programs lag behind competitors’ late-stage candidates, prompting speculation that Pfizer will pursue acquisitions to rebuild its pipeline.

M&A Speculation: Winners and Losers in the GLP-1 Space

The void left by Pfizer’s withdrawal has created opportunities for smaller players and competitors alike. Analysts at William Blair and JPMorgan highlight Viking Therapeutics and Structure Therapeutics as leading M&A candidates.

Viking Therapeutics (VSTX):
Viking’s shares surged 13% in April 2025 as investors bet that its oral/subcutaneous obesity drug VK2735 could attract Pfizer’s interest. VK2735, a dual GLP-1/GIP receptor agonist, is in Phase 2 trials for its oral formulation and Phase 3 for its injectable version. Analysts note its potential to challenge Lilly and Novo Nordisk’s dominance, though concerns about manufacturing partnerships and competitive pressure from Chinese drugmakers linger.

Structure Therapeutics:
Structure’s stock rose on the back of its differentiated oral GLP-1 RA, aleniglipron, which showed positive Phase 2 data. With a smaller market cap ($1 billion) and a faster path to market, Structure is seen as a more cost-effective acquisition target than Viking. JPMorgan analysts argue its asset could become the second small-molecule oral GLP-1 RA to reach the market, offering a cheaper alternative to injectables.

Other firms benefiting from Pfizer’s struggles include:
- Altimmune (ALTG): A dual-acting obesity drug in Phase 2 trials saw a 9% stock jump.
- Terns Pharmaceuticals (TERN): Its oral GLP-1 RA TERN-601, which showed no liver enzyme issues in Phase 1, drew attention as a safer bet.
- Metsera (MTRX): A long-acting GLP-1 shot raised $275M in an IPO earlier in 2025.

Risks and Regulatory Realities

While M&A optimism is high, risks persist. Liver toxicity remains a critical hurdle for GLP-1 drugs, as Pfizer’s danuglipron case illustrates. Regulatory scrutiny of oral formulations is intensifying, with agencies demanding robust safety data. Additionally, the obesity sector faces broader investor skepticism, with stocks down 40–80% since 2021.

Pfizer’s pipeline gaps also highlight the challenges of developing oral GLP-1 therapies. Competitors like Novo Nordisk (Rybelsus) and Lilly (oral Zepbound) are advancing Phase 3 candidates, while Zealand Pharma’s survodutide and AstraZeneca’s collaborations loom as threats.

Conclusion: A High-Stakes Race for Market Share

Pfizer’s danuglipron discontinuation has crystallized the obesity market’s competitive dynamics. With the company’s internal pipeline in disarray and its stock under pressure, M&A appears inevitable. Analysts estimate Pfizer could deploy $10–$15 billion to acquire assets like Viking’s VK2735 or Structure’s aleniglipron, both of which offer pathways to challenge industry leaders.

However, success hinges on navigating regulatory hurdles and manufacturing logistics. For smaller firms, the opportunity is clear but fraught with risk: clinical trial outcomes, manufacturing scalability, and the ability to secure partnerships will determine long-term viability. Meanwhile, established giants like Novo Nordisk and Lilly are unlikely to cede ground easily, with their injectables generating $13 billion in 2023 sales.

The GLP-1 race is far from over. With Pfizer’s pipeline in tatters and smaller players gaining traction, 2025 could mark the start of a wave of consolidation in the obesity therapeutics sector—one where strategic acquisitions will decide who wins the $150 billion prize.