Pfizer (PFE) announced early Monday that it is halting a late-stage trial of its GLP-1 pill candidate, danuglipron, dashing hopes of the company entering the obesity space in the near term.

A trial participant in the phase III trial of its once-daily pill experienced "potential drug-induced liver injury" that disappeared after the participant stopped the pill, the company said in a statement.

"While we are disappointed to discontinue the development of danuglipron, we remain committed to evaluating and advancing promising programs in an effort to bring innovative new medicines to patients," Pfizer chief scientific officer Chris Boshoff said.

The company had hoped to compete in the obesity space and had been optimistic in recent public statements about the potential of danuglipron.

This is the latest disappointment in what has been a bumpy ride in Pfizer's attempt to enter the hot obesity market and compete with market leaders Eli Lilly (LLY) and Novo Nordisk (NVO). It previously had a twice-daily pill that was also scrapped after similar liver concerns in 2023.

The two obesity market leaders, with their blockbuster injectables, have left room for an oral, or pill, market to be a new meaningful target for newer players, according to investors. Lilly is the furthest ahead with its oral candidate, orforglipron, in phase 3 trial, which is expected to end this year.

The news was a surprise to Wall Street but not enough to significantly impact the stock. Pfizer's stock traded mostly flat in early Monday.

"From here, while we anticipate shares to be down modestly, we do not think the Street was assigning any meaningful value to the asset and see limited downside given the company's current valuation," JPMorgan analyst Chris Schott wrote in a note to clients Monday.

Pfizer has been under pressure to find a new blockbuster in its pipeline to fill the expected revenue drop from some of its key drugs going off patent by the end of the decade. That includes its Prevnar 13 vaccine next year and cancer drug Ibrance in 2028. Both brought in a combined $10.8 billion in 2024, with the Prevnar vaccines contributing $6.4 billion.

Mizuho healthcare sector expert Jared Holz explained: "Now without a GLP in its (near-term) pipeline, it is now feasible that PFE could look to bring in an asset (external business development) should it choose to stay in the weight-loss game to some extent."

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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