Shares of Pfizer (NYSE: PFE) were sinking 4.4% lower as of 11:10 a.m. ET on Friday after falling as much as 7.1% earlier in the morning. The sell-off came after the company announced that it’s throwing in the towel on a twice-daily version of experimental weight-loss pill danuglipron.

Pfizer made the decision based on results from a phase 2b clinical study of danuglipron. This study achieved its primary endpoint, with patients experiencing placebo-adjusted weight loss between 5% and 9% at 26 weeks and between 8% and 13% at 32 weeks. However, there were high rates of side effects (up to 73% of patients experienced nausea and up to 47% experienced vomiting). Discontinuation rates were also very high — above 50%.

How bad was this news for Pfizer?

There was simply no way that Pfizer could advance the twice-daily version of danuglipron into phase 3 testing with the dismal adverse event and discontinuation numbers. But how bad was this news for Pfizer? Pretty bad.

Danuglipron was widely viewed as the company’s top pipeline candidate. Pfizer CEO Albert Bourla stated earlier this year that it could become a “$10 billion product for us in a market that could be $90 billion.”

The silver lining in the dark cloud is that Pfizer still has hopes for a once-daily formulation of the weight-loss drug. The big drugmaker expects to report results from a phase 2 study in the first half of 2024.

Is Pfizer stock a buy on the dip?

I think that Pfizer could be a great stock to buy on the dip for income investors especially. Its dividend yield now tops 5.6%.

The bad news related to danuglipron isn’t disastrous for Pfizer. The pharma giant still has plenty of new products and new indications for existing products to help drive revenue growth. And there’s still a possibility that Pfizer could still grab a nice share of the huge obesity drug market if the once-daily version of danuglipron pans out.

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Keith Speights has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.