(Adds prospective launch timing and diagnostic challenge in paragraphs 7-9, details on MASH, Altimmune stock move in 16)

FRANKFURT, Feb 26 (Reuters) - Shares in Zealand Pharma soared 34% on Monday after an experimental weight-loss drug it is developing with Boehringer Ingelheim yielded what they called "groundbreaking" mid-stage trial results in the treatment of fatty liver.

The study is channeling investor attention to a related disease area within a global race for new obesity treatments.

The trial testing the drug survodutide to treat the liver disease metabolic dysfunction-associated steatohepatitis, or MASH, met its primary and key secondary endpoints, the two companies said in a statement.

By 1540 GMT, Zealand's stock was set to close at a record high and was the best performer on the STOXX Europe 600 , which was down 0.3%.

Seeking to challenge obesity treatment market leaders Novo Nordisk and Eli Lilly, Zealand and unlisted Boehringer in June 2023 reported promising intermediate Phase II weight-loss trial results, with the largest and most expensive final stage of testing still to be cleared.

Germany's family-owned Boehringer and Denmark's Zealand said on Monday that up to 83% of trial participants treated with survodutide saw their MASH improve, compared with 18.2% in a comparable group on a placebo.

Carinne Brouillon, in charge of Boehringer's human pharma unit, told Reuters she was hoping for a launch in 2027 or 2028, contingent on favorable late-stage trial results, but it was not yet clear for which of the two uses the drug would win regulatory clearance first.

She added that the diagnostics industry was working on blood tests and non-invasive imaging technology to better pick MASH patients for early therapy.

"Today, people are being diagnosed too late... the initial phases are asymptomatic and you notice it when it's too late," said Brouillon.

Details of the trial will be presented at an as yet undisclosed medical conference during the first half of the year, the companies added.

The liver condition, which used to be called non-alcoholic steatohepatitis, results from an often diet-related build-up of fat in the liver, causing inflammation, followed later by potentially deadly liver scarring, or cirrhosis.

Affecting an estimated 115 million people worldwide and causing the need for an organ transplant in some patients, MASH is targeted by several other drugmakers as additional uses for their new obesity drugs. No therapy is currently available.

Obesity drug pioneer Novo is testing semaglutide, the active ingredient in its Wegovy weight-loss injection, in a Phase III trial against MASH.

Lilly, which has launched rival obesity drug Mounjaro, also known as Zepbound, is testing the drug's active ingredient against the liver disease in Phase II.

The Zealand-Boehringer drug mimics a gut hormone called GLP-1 which suppresses appetite as do other injectable treatments like Wegovy, but it also imitates another gut hormone called glucagon.

Shares in Altimmune, which is working on a drug based on the effects of the same two hormones, also jumped on the news.

Lilly's Mounjaro also has a dual mode of action, but based on the hormones GLP-1 and GIP. (Reporting by Ludwig Burger Editing by Susan Fenton and Mark Potter)