The market for obesity drugs presents one of the most lucrative targets for biopharmaceutical companies. Eli Lilly and Novo Nordisk are already raking in billions of dollars in sales with their weight-loss drugs. Other drugmakers are eyeing the market as well.

Pfizer (PFE 3.38%) is certainly in that group. However, the company finds itself at a distinct disadvantage after it recently threw in the towel on experimental obesity pill danuglipron because of safety concerns. Could Pfizer solve the issue by acquiring an up-and-coming biotech with a promising obesity drug in clinical development?

Two great acquisition targets

The good news for Pfizer is that it shouldn't have any problems finding an acquisition candidate if it chooses to go that route. I can think of two great targets off the top of my head.

Let's start with Altimmune (ALT 0.59%). The company has what it calls "a pipeline in a product" with experimental GLP-1/glucagon dual receptor agonist pemvidutide.

Altimmune met with the U.S. Food and Drug Administration in November 2024 at the end of successful phase 2 testing of the drug in treating obesity. It expects to report results from a phase 2 study of pemvidutide in liver disorder metabolic-associated steatohepatitis (MASH) in the second quarter of 2025. Altimmune also plans to advance the drug into phase 2 studies later this year as a potential treatment of alcohol use disorder and alcohol-associated liver disease.

Viking Therapeutics (VKTX 7.63%) stands out as another potential acquisition target for Pfizer. The company expects to begin phase 3 testing of a subcutaneous version of GLP-1/GIP receptor dual agonist VK2735 in treating obesity this year. It's conducting a phase 2 study of an oral formulation of the drug, with results anticipated in the second half of 2025.

Like Altimmune, Viking has a promising pipeline candidate targeting MASH, which is also known as nonalcoholic steatohepatitis. The company reported positive phase 2 results for its MASH drug, VK2809, last year. In addition, Viking is developing VK0214 as a potential treatment for the rare genetic disorder X-linked adrenoleukodystrophy (X-ALD).

Evaluating Pfizer's ability to fund a deal

Pfizer's cash, cash equivalents, and short-term investments totaled nearly $20.5 billion at the end of 2024. The big pharmaceutical company raked in revenue of $63.6 billion last year with a profit of over $8 billion. The main negative for the company is its huge debt load of around $64 billion.

Still, Pfizer appears to be in a good financial position to move forward with a bolt-on acquisition. I think buying either Altimmune or Viking would be a relatively painless deal for Pfizer.

Altimmune's market cap is currently below $400 million. Even if we assumed a hefty premium to close a takeover of the company, Pfizer should be able to fund the transaction without taking on additional debt.

Acquiring Viking wouldn't be quite as cheap, with its market cap of almost $3 billion. However, Pfizer should be able to finance a buyout of Viking with its cash stockpile without breaking a sweat if it wanted to make a deal.

Will Pfizer acquire one of these smaller drugmakers?

But will Pfizer choose to acquire either Altimmune or Viking? I'm not sure. Although danuglipron is no longer a contender, Pfizer still has another experimental oral obesity drug in phase 2 testing -- PF-07976016.

I wouldn't be surprised if Pfizer waited to get a better feel for how PF-07976016 fares in clinical development before making a decision on potentially pursuing an acquisition. However, the company probably can't wait too long. Other big drugmakers seeking to enter the obesity market could have their sights set on Altimmune and Viking, too.