By Alex Philippidis
Is celebrity use, confirmed or otherwise, enough to propel the fast-growing market for obesity drugs into a stratosphere as high as $100 billion by 2030, as projected recently by Barclays, Goldman Sachs, and Pfizer?
“They can’t hurt,” said Jared Holz, healthcare equity strategist and sector specialist at Mizuho Securities.
Addressing a New York City audience earlier this week, Holz cited Elon Musk, who has confirmed using Novo Nordisk’s obesity drug Wegovy® (semaglutide), and Amy Schumer, who has acknowledged trying Novo Nordisk’s type 2 diabetes treatment Ozempic® (semaglutide) but giving it up due to side effects. Holz then added to his list Kim Kardashian, who is rumored to have lost weight through Ozempic, though she has credited diet and exercise.
“Anything that Kim does, I’ll do it,” Holz quipped, drawing laughs Monday at Stat News’ annual “STAT in NYC” event.
Holz and Liisa Bayko, managing director and research analyst at Evercore ISI, got more serious discussing the market that has arisen around glucagon-like peptide 1 (GLP-1) weight loss drugs, and the factors likely to shape its future growth trajectory.
That market reached $6 billion this year, according to Goldman Sachs, thanks to zooming sales of treatments like Ozempic and Wegovy, as well as Eli Lilly’s Mounjaro® (tirzepatide). Lilly added to its obesity portfolio last month by winning FDA approval to market Mounjaro’s active ingredient to treat adults with obesity or who are overweight under the name Zepbound®.
Novo Nordisk and Lilly are expected to remain dominant players in obesity medications by 2030, according to Goldman Sachs. The firm’s $100 billion estimate reflects several factors starting with a total addressable patient population of about 15 million adults—approximately 13% of the eligible U.S. adult population with obesity.
The extent of reimbursement by insurers, duration of use among patients, and pricing of the treatments are other key factors, Goldman Sachs said.
These and other factors surfaced in the discussion by Holz and Bayko.
“I think the pipeline is continuing to iterate, definitely segmenting the market more, tailoring things to, ‘I want 10% body weight loss,’ ‘I want 20%,’ ‘I want 30%,’ ‘I want to tone my muscle mass,’ ‘I need to deal with my liver,’” Bayko said. “I think there’s further segmentation, like there really is with anything, actually.”
Bayko and Holz cited numerous challenges to continued sales growth for obesity drugs:
- Competition—Both analysts cited growing interest by biotechs and pharmas in developing obesity drugs, reflected recently in Roche’s planned up-to-$3.1 billion acquisition of Carmot Therapeutics. Bayko said she tracked 56 such drugs in development as of Monday divided roughly evenly between biotechs and pharmas, and estimated that Roche’s deal brought to more than half the number of pharmas in the obesity space.
- Discontinuation—“People go off of these over time for various reasons. Either they’ve lost the weight, they no longer feel the need, or they don’t really need to stay on these chronically, otherwise they gain the weight back,” Bayko offered.
- Insurance—“We’ve seen a lot of these plans already cap it at a certain number per person, so you’re not going to be on the drug forever,” Holz said. Added Bayko: “Is the growth so great on the front end that we’re kind of overcoming that? I think that [growth] will be for a while, so I think that will be a long-term play. We’re still, I think, in the euphoria part of that.
- Modality—Current drugs are injectable, though Mounjaro can be injected via vial and needle or pre-filled pen. Novo Nordisk is developing an oral Wegovy for which the company announced positive clinical results in May. “When oral drugs come to fruition, that’s going to be another big step up. There are just so many people that don’t want to take injectable drugs,” according to Bayko.
- Pricing—“Obviously the population is huge, you attach some sort of average pricing of $500 to $1000 a drug and you get to these pretty astronomical numbers,” Holz said. Actually, list prices for top-selling obesity drugs range from $77/month for Ozempic, to $1,023.04/month for Mounjaro to $1,349.02/month for Wegovy.
“Start of this journey”
“We’re just on the start of this journey towards the $100 million market,” Bayko said.
Holz questioned the mostly-accepted $100 billion by 2030 market growth estimate.
“You get to that by using Microsoft Excel, right?” Holz only half-kidded. “I think that’s pretty much the genesis of the market building and the narrative that the market can be this big, this soon.”
“I believe there’s far too many variables in place today to really make a market size call,” Holz added.
Brian P. Skorney, a senior research analyst with Baird, said from the audience that the rapid growth of obesity drug evokes memories of two drug specialties that over the past decade enjoyed meteoric jumps in sales that proved unsustainable—hepatitis B and COVID-19.
“What changes that for GLP-1, where it’s really a chronic indication, and you don’t have that breaking point?” Skorney asked.
Holz cited planned data releases by Novo Nordisk, Lilly, and other drug developers assessing their obesity drugs in various medical conditions linked to obesity, including sleep apnea and arthritis.
“I feel like the tail for this sector within the market is super-long, and I think it’s going to take a while for the Street to kind of figure out exactly who the players are going to be, to what extent, and then what does that do to the market,” Holz said.
He said the soaring sales of obesity drugs is one of the few bright spots for biopharma investors within an otherwise dreary landscape, Holz contended.
“In the biotech and biotherapeutic sector, this is really the only narrative that seems to be getting anyone interested, whether its healthcare dedicated (investors), or whether it’s generalist investors that are looking for a storyline that they can ride out for a long time,” Holz said.
“Pharma as a sector has to come up with something more interesting than what they’ve got, which is basically declining sales and earnings from now until 2030,” Holz added. “It would help if there was one other present storyline that had investors hot and bothered to any degree.”
Leaders & laggards
- Alterity Therapeutics (ATHE) shares more than doubled, zooming 153% from $1.66 to $4.20 after the company announced that it presented positive preclinical data about the effect of its ATH434 in a Parkinson’s disease (PD) primate model. The presentation showed that ATH434 treatment improved motor performance and general function in monkeys with experimentally induced PD. That favorable impact on PD symptoms was associated with lower iron levels. ATH434 treatment also increased levels of synaptophysin, a protein marker that reflects functional connections between neurons. The poster was presented at the Future of Parkinson’s Disease Conference 2023, held November 30–December 3, 2023 in Austin, TX.
- EyePoint Pharmaceuticals (EYPT) shares nearly tripled, rocketing 177% from $6.61 to $18.34 on Monday after the company announced positive topline results from its Phase II DAVIO 2 trial (NCT04747197) assessing EYP-1901 (vorolanib and Durasert E™), a sustained delivery maintenance candidate for wet age-related macular degeneration (wet AMD). The trial met its primary endpoint as both EYP-1901 doses showed statistical non-inferiority change in best corrected visual acuity (BCVA) compared to aflibercept control and a favorable safety profile with no EYP-1901-related ocular or systemic serious adverse events. The trial also achieved key secondary endpoints with both EYP-1901 doses, including an over 80% reduction in treatment burden, nearly two-thirds of eyes supplement-free up to six months and over 80% receiving only zero or one supplement up to six-months.
- Replimmune Group (REPL) shares tumbled 45% from $12.32 to $6.75 on Tuesday after the company acknowledged that RP1 in combination with Regeneron Pharmaceuticals (REGN)’s Libtayo® (cemiplimab) missed both primary endpoints in the Phase II CERPASS trial (NCT04050436), complete response rate (CRR) and overall response rate (ORR). The 211-patient trial assessed the combination in advanced cutaneous squamous cell cancer. Replimmune quickly added that the combination showed clinically meaningful improvements in CRR vs. cemiplimab alone—1% vs. 25% among all patients, but a much starker 48.1% vs. 22.6% among the 83 patients with locally advanced disease. Repligen said the trial will continue as planned to assess duration of response, progression free survival, and overall survival with more mature data.
- Solid Biosciences (SLDB) shares soared 68% from $3.42 to $5.76 on Thursday after the company said the FDA granted its Fast Track designation for SGT-003, the company’s next-generation Duchenne muscular dystrophy (DMD) gene therapy candidate. SGT-003 is designed to deliver a DNA sequence encoding a shortened form of the dystrophin protein (microdystrophin) containing the R16-R17 nNOS binding domain, through a “rationally-designed” capsid (AAV-SLB101). Solid received IND clearance for SGT-003 last month, with plans to launch a Phase I/II trial (SGT-003-101; NCT06138639) in pediatric DMD patients. The first in human, open-label, multicenter trial will be designed to determine the safety and tolerability of SGT-003 in pediatric DMD patients at a dose of 1E14vg/kg.
Alex Philippidis is Senior Business Editor of GEN.