How novel weight loss drugs are tipping the scale within global healthcare

How novel weight loss drugs are tipping the scale within global healthcare

By João Guerreiro

Access our report for a concise summary of this article’s key takeaways, plus an exclusive list of drugs undergoing clinical trials.

In the last year, the fight against obesity saw a breakthrough in both outcomes and business opportunities. The two frontrunners in weight loss medications have led the charge and become the most valuable companies in the pharma world. What started as a market barely worth $1 billion in 2020 is now on track to hit a staggering $100 billion by 2030! 

While these results are impressive, the real story is the potential of these drugs beyond weight loss. Obesity is linked to some of the most serious diseases in the developed world. Hence, the big question is whether these new drugs could also be game-changers for overall healthcare.

In this article, we’ll discover how a single new drug not only revolutionized a company’s fortunes but also an entire landscape. We’ll also explore the burgeoning innovation within the weight loss drug market, ripe with competition, and discuss why this sector’s developments are pivotal, even for those not directly involved in weight loss solutions. 

Pharmaceutical giant breaks valuation records: 

Novo Nordisk revenue

As the seasons shift, so too does the landscape of the pharmaceutical industry. Novo Nordisk has recently cemented itself as Europe’s most valuable company. It has surpassed the $500 billion valuation mark. 

This milestone for the Danish pharmaceutical giant was not unexpected. The release of their 2023 results merely confirmed what analysts had been predicting: the soaring success of their semaglutide-based drugs. 

With Wegovy’s sales skyrocketing by 400% despite facing supply shortages, it’s clear why. Currently, more than half of Novo Nordisk’s revenue is generated by semaglutide under both the Ozempic and Wegovy brands. This highlights the drug’s transformative role in both the company’s fortunes and the broader weight loss market. 

It is now a race, a $100B race!

Novo Nordisk no longer races alone. Goldman Sachs estimated the injectable drug market for weight loss to reach at least $100B by 2030, and they are far from the only ones to have noticed it.

Eli Lilly’s recent approval for Zepbound, a GLP-1/GIP receptor agonist known as Mounjaro in the diabetes market, sets the stage for a fierce battle with Novo for market dominance. While Novo Nordisk and Eli Lilly might be at the forefront, the question will be for how long. 

Boehringer Ingelheim, in collaboration with Zealand Pharma, will likely be the next big challenger after advancing its promising candidate survodutide, a GCGR/GLP-1R dual agonist, to Phase 3 clinical trials last year. This means it could reach the market as early as 2027. 

Open clinical trials for weight loss

Other pharmaceutical giants are in pursuit. Roche has made a significant move by acquiring Carmot Therapeutics for $2.7 billion, following promising Phase I results for its own GLP-1/GIP receptor agonist. Similarly, Amgen just published promising results of their Phase 1 trial, with Phase 2 results expected later this year.  

AstraZeneca’s $2 billion licensing deal with Eccogene for an experimental pill offers fewer side effects based on early trials. This shows the industry’s next pivot towards non-injectable alternatives. 

All this potential can easily come crumbling down, as demonstrated by Pfizer’s disappointing Phase 2b results late last year. Their attempt at a twice-a-day oral GLP-1 agonist was met with setbacks due to adverse side effects. This left the company with the challenge of reformulating the drug into once-daily dosing while pushing to achieve the same outcomes. 

Amidst this activity, Novo Nordisk and Eli Lilly are not standing still. Both companies are developing oral formulations of their blockbuster drugs. Novo Nordisk is expected to take the lead, potentially launching its oral formulation as early as 2025. 

Eli Lilly’s is not far behind and recently further diversified its portfolio with the acquisition of Versanis. This would allow them to combine a monoclonal antibody with a GLP-1 agonist to address muscle mass loss, a notable side effect of all GLP-1 treatments.

Beyond big pharma – there is still a lot brewing!

The weight-loss clinical research and development sector extends well beyond the established giants. Weight loss has been an attractive field for decades and it has had its fair share of failures but there is a renewed interest. 

Number of registered clinical trials

A number of biotech firms are advancing through Phase I and II trials, with many smaller entities actively seeking partnerships to expedite their journey. This renewed vigor is evidenced by a remarkable uptick in the number of registered clinical trials: 2023 alone saw 30 new trials, with 40% of those being industry sponsored (Full list of ongoing clinical trials in the space available here.)

The spike in clinical trials is just one indicator of the sector’s dynamism and potential. The volume of scientific publications and intellectual property submissions echo this. Nearly 50,000 scientific publications annually are now being dedicated to weight loss. Many of the publications likely support the approximately 90,000 patent submissions registered in 2023. These figures represent a substantial growth: 33-40% since 2018, a stark contrast to the more modest increases of 7-10% seen in the previous five years.

The increase in scientific and patent publications

What’s so different about these new weight loss drugs?

GLP-1 agonists are not new to the pharmaceutical landscape; the FDA approved the first such drug, exenatide, in 2005. Initially focused on managing type 2 diabetes, it would not be until 2014 that Novo Nordisk’s introduction of another GLP-1 agonist, Saxenda, marked a pivotal shift towards weight loss. 

The real game-changer has been the impressive results these drugs deliver. Before GLP-1 agonists, traditional weight loss medications typically offered a modest 6% body weight reduction. 

In contrast, semaglutide (marketed as Ozempic/Wegovy) has enabled patients to shed up to 15% of their body weight. This has sparked widespread interest and demand, even leading to global shortages due to off-label use.

Eli Lilly’s Mounjaro has pushed the envelope further, showing more than 20% body mass reduction in trials and generating over $500 million in sales in its debut quarter!  

These record sales have occurred despite limited insurance coverage in the U.S., with neither Wegovy nor Zepbound broadly covered by employer plans or Medicare. 

Even without adequate insurance support, the demand from the developed world remains insatiable. The U.S. and E.U. alone are home to over half a billion overweight individuals. 

Overweight population in the U.S, E.U and the world.

Both Novo Nordisk and Eli Lilly face significant challenges in scaling up production to meet this demand. Despite earmarking billions of dollars to expand manufacturing capabilities, the sudden surge in demand for auto-injectors exceeds current infrastructure capacities. As such, both companies admit they are unlikely to meet market needs for the next few years.

Can novel weight loss drugs change the healthcare landscape?

The widespread prevalence of obesity comorbidities significantly influences healthcare across the board. Obese individuals have a 50% to 100% increased risk of premature death from all causes compared to individuals with a healthy weight. 

Going through the list of the most common causes of death can be sombering. From heart disease –  2,5 times more likely to suffer from it – to various cancers – up to 5 times higher likelihood of occurrence, depending on the cancer. Even the risk of mortality from accidents is elevated among the overweight population. 

The pressing question remains: how transformative will the introduction of these new weight loss drugs be across the broader healthcare landscape? While quantifying their full impact remains challenging, the consensus among experts is clear: the effect will be significant, far from negligible.

Obesity comorbidities market size in billions.

Wegovy shows direct health benefits beyond weight-loss 

Some evidence of that impact is already being put out there. A five-year study demonstrated that weekly Wegovy injections reduced the overall risk of heart attack, stroke, and cardiovascular death by 20%. 

In a different study, Wegovy showed a 73% decrease in the progression to diabetes. This positions the drug as a potential preemptive treatment. 

These findings represent just a glimpse into how weight loss drugs can disrupt the market for existing treatments. Also, it will have an impact on the broader ecosystem of healthcare services, potentially changing your patients’ population characteristics and their journey. 

Changing the healthcare landscape 

With the introduction of these weight loss treatments, pharmaceutical companies face a critical juncture. Even if these drugs do not pose a threat as a direct competitor, the expected decline in obesity rates will inevitably lead to a shift in healthcare demands. And this will challenge companies to adapt and innovate. 

There’s a dual opportunity here. Firstly, to enter the competition by enhancing current weight loss drugs, mitigating their limitations and side effects. And secondly, to proactively address the far-reaching effects these treatments have on obesity-related health conditions. 

Opting out of this race is expected for many. But, ignoring to strategically account for the global implications of reducing obesity could prove costly.

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