Danish biotech Zealand Pharma is tumbling approximately 25 percent on the stock market after detailed Phase 3 data for the obesity drug survodutide, co-developed with Boehringer Ingelheim, sparked concerns regarding side effects and treatment discontinuation rates.

According to Bloomberg News, analysts highlighted that while the drug demonstrated positive effects on weight loss, body composition, and liver fat, tolerability remained weak. In the study, 19 percent of participants discontinued treatment due to gastrointestinal side effects, compared to 2.9 percent in the placebo group.

Several analysts believe the high incidence of side effects could hinder the drug's ability to compete in the rapidly expanding market for obesity and metabolic treatments.

At the same time, some observers pointed to promising results in liver disease, where the drug reduced liver fat by up to 63.1 percent and visceral fat by up to 34 percent.

Zealand Pharma is entitled to royalties on global sales as well as remaining milestone payments of up to 315 million euros.