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Weight reduction drugs exploded into the general public eye this 12 months, and 2024 will bring more change to the evolving market.
The drugs skyrocketed in popularity in 2023 as they helped patients shed significant weight, despite hefty price tags, mixed insurance coverage and a handful of unpleasant uncomfortable side effects.
Demand for the drugs is unlikely to decelerate in 2024, especially as treatments step by step grow to be more accessible. Much of Wall Street believes the burden loss drug market will only expand, with some analysts projecting that it’s going to be value $100 billion by the tip of the last decade. Goldman Sachs analysts expect 15 million U.S. adults to be on obesity medications by 2030.
But next 12 months, investors can be watching how the dominant players available in the market, Novo Nordisk and Eli Lilly, navigate supply issues plaguing their treatments. Patients have been struggling to get their hands on Novo Nordisk’s weight reduction injection Wegovy, its diabetes treatment Ozempic, and Eli Lilly’s diabetes injection Mounjaro.
Analysts expect supply constraints to enhance but note that the broader issue will take years to resolve.
Outside of supply headwinds and the dearth of broader insurance coverage for weight reduction drugs, Novo Nordisk and Eli Lilly have a giant 12 months ahead of them.
Novo Nordisk could win approvals for expanded use of Wegovy within the U.S. and Europe. Eli Lilly’s newly approved weight reduction drug, Zepbound, could garner greater than a billion dollars in sales in its first 12 months available on the market.
Each corporations are also expected to release latest data that would show other potential health advantages of their drugs beyond weight reduction and diabetes management, which can increase insurance coverage down the road.
Next 12 months may mean much more to the opposite corporations hoping to affix what’s to date been a two-horse race to make weight reduction treatments.
Recent drug data from Pfizer and Amgen, and the potential for more buyouts or collaborations between larger corporations and smaller makers of obesity drugs, could alter the market’s competitive landscape in the approaching months.
Supply issues could ease but won’t go away
Some analysts said supply constraints will likely persist for years, but expect them to ease in 2024 as Novo Nordisk and Eli Lilly work to expand manufacturing capability for his or her drugs.
Novo Nordisk during its third-quarter earnings call in November said it’s ” significantly scaling our supply” of Wegovy within the U.S. in 2024. TD Cowen analyst Michael Nedelcovych told CNBC that the corporate in the course of the call appeared to suggest that such a change would not appear to be a giant jump in supply but relatively regular improvements over time.
Supply could increase more significantly years from now: Novo Nordisk in November said it could invest $6 billion to expand its manufacturing facilities in Denmark, noting it’s going to finish construction from the tip of 2025 through 2029. The corporate also said it could spend around $2.3 billion to expand one other production site in France.
Top weight reduction and diabetes drugs
Wegovy from Novo Nordisk is a weekly weight reduction injection for adults with obesity or who’re obese. The drug mimics a hormone produced within the gut called GLP-1 to suppress an individual’s appetite.
Zepbound from Eli Lilly is a weekly weight reduction injection for adults with obesity or who’re obese. The treatment mimics GLP-1 and one other gut hormone called GIP to scale back appetite and food intake.
Ozempic from Novo Nordisk is a weekly injection that helps lower blood sugar levels in adults with Type 2 diabetes. The medication mimics GLP-1 to suppress appetite and help the pancreas make more insulin.
Mounjaro from Eli Lilly is a weekly injection that helps lower blood sugar levels in adults with Type 2 diabetes. The drug mimics GLP-1 and GIP to curb appetite and stimulate insulin production.
Meanwhile, Eli Lilly said during its third-quarter earnings call in November that provide of Mounjaro has improved within the U.S. whilst it stays constrained across the globe.
Executives also said that Eli Lilly is on the right track to attain its goal of doubling production capability for drugs equivalent to Mounjaro, partly through investments in latest manufacturing sites in North Carolina and Indiana.
But Eli Lilly CEO David Ricks said on the decision that the corporate is “aggressively planning” further production buildup for Mounjaro and other drugs. He added that “it’s an issue we work on on daily basis. So we’re under no circumstances blissful with the capability.”
Zepbound could grow to be a blockbuster
The FDA approves Eli Lilly’s Zepbound, a weight reduction drug just like Ozempic and Wegovy.
Courtesy: Eli Lilly
Morgan Stanley expects Zepbound to rake in $2.2 billion in sales in 2024, based on a note released after the drug’s approval in November. Meanwhile, Bank of America analysts in a November note projected $2.7 billion in Zepbound revenue in 2024.
Some analysts expect way more sales growth for Zepbound and Mounjaro beyond 2024. Tirzepatide, the lively ingredient in each drugs, has a “very strong shot of being the best-selling molecule of all time within the pharmaceutical industry,” said Guggenheim’s Fernandez.
Wall Street is captivated with Zepbound partly because it might cause more weight reduction than Wegovy. Studies directly comparing the 2, including an ongoing trial from Eli Lilly, would need to substantiate that.
Results from that trial could come out next 12 months after initial data from separate studies examining Zepbound as a possible treatment for other health conditions, including heart failure.
Mixed insurance coverage will likely weigh on sales of Zepbound and other weight reduction drugs in 2024, but Eli Lilly has already secured some coverage for the drug.
Wegovy could make history again
Wegovy made history this 12 months when it slashed the danger of great heart problems by 20% in individuals with obesity and heart disease in a late-stage trial. In 2024, the drug could shake up the pharmaceutical industry again if U.S. and European regulators determine to approve it for that purpose.
Those potential approvals, which might make Wegovy the primary GLP-1 drug to have an expanded use for heart health, are a “foregone conclusion” for Novo Nordisk, Cantor Fitzgerald’s Louise Chen told CNBC.
Still lifetime of Wegovy an injectable prescription weight reduction medicine that has helped individuals with obesity. It needs to be used with a weight reduction plan and physical activity.
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An FDA approval could potentially increase the uptake of Wegovy, encouraging more obesity specialists, primary care providers and cardiologists to prescribe it to eligible patients, said Dr. Eduardo Grunvald, medical director for UC San Diego’s Center for Advanced Weight Management.
An approval may additionally put more pressure on U.S. insurers to eventually cover Wegovy and similar weight reduction treatments, opening the door for broader use.
Eli Lilly can also be studying the cardiovascular advantages of Zepbound in a phase three clinical trial in diabetes patients with increased cardiovascular risk, and results are expected in late 2024. The drugmaker is conducting a similar study in obese patients with heart-health risks, but results may not come until 2027.
Meanwhile, Novo Nordisk’s other treatments could reach their very own milestones next 12 months.
Novo Nordisk expects to release data in the primary half of 2024 from a late-stage trial examining Ozempic as a treatment for kidney failure in diabetes patients with chronic kidney disease. The corporate hinted that the trial can be a hit when it halted the study a 12 months sooner than planned in October based on an interim evaluation.
Upcoming clinical trial data releases
- A phase-three trial from Eli Lilly on Zepbound as a treatment for cardiovascular complications in diabetes.
- A phase-three trial from Novo Nordisk on Ozempic as a treatment for kidney failure in diabetes patients with chronic kidney disease.
- A phase-three trial from Novo Nordisk on a 25-milligram version of its once-a-day weight reduction pill.
- A phase-three trial on Zepbound as a possible treatment for heart failure in patients with obesity.
- A phase-three trial on Zepbound as a possible treatment for non-alcoholic fatty liver disease, which is attributable to fat buildup within the liver, in patients with obesity.
- A phase-three trial on Zepbound as a possible treatment for obstructive sleep apnea, or the pause of respiratory during sleep resulting from blocked airways, in patients with obesity.
- A phase-three trial on IcoSema, a mix of once-weekly insulin and once-weekly semaglutide, in patients with diabetes.
Novo Nordisk can even release phase three clinical trial data on a 25-milligram version of its once-a-day weight reduction pill, which uses semaglutide, the identical lively ingredient as in Ozempic and Wegovy.
That trial is crucial because Novo Nordisk is waiting to see that data before filing for approval of the oral weight reduction drug, said Cowen’s Nedelcovych. He added that in the long run, the provision of weight-loss pills could boost capability for his or her injectable counterparts.
Also in 2024, a study following patients from a previous late-stage trial could potentially generate data supporting Wegovy as a treatment for stopping the event of diabetes, Nedelcovych said.
A make-or-break 12 months for Pfizer
Recent data next 12 months can be crucial to determining whether Pfizer gets a chunk of the burden loss drug space. The stakes are high: CEO Albert Bourla has said the corporate hopes to capture $10 billion of that market.
Pfizer axed a twice-daily version of the one obesity product in its pipeline earlier this month after patients taking the pill lost significant weight but had trouble tolerating the drug in a mid-stage study.
Now, the corporate is pinning its hopes on a once-a-day version of the pill, generally known as danuglipron, which it believes may cause fewer hostile uncomfortable side effects. Pfizer said it expects to release more data on that version of the drug in the primary half of 2024, which is able to help the corporate determine whether to begin a late-stage study on the pill.
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Nonetheless, some analysts have raised questions on whether the once-a-day version can be easier to tolerate.
“Despite ongoing work, tolerability still appears to be a difficulty with the product, and it is just not clear to us why it will improve” in a phase three trial or with a once-daily version, JPMorgan analyst Chris Schott said in a December note.
Barclays analyst Carter Gould said in a December note that it’s “increasingly apparent” that the corporate can have to look externally for an obesity treatment, whether that is through an acquisition or partnership, to capture a slice of the burden loss drug market prefer it had hoped.
Meanwhile, upcoming data will reveal how serious Amgen’s weight reduction drug portfolio is. In the primary half of 2024, Amgen is slated to publish early stage trial data on an oral weight reduction medication.
Within the second half of the 12 months, Amgen plans to release mid-stage trial data on an injectable drug that helped cause as much as 14.5% weight loss after 12 weeks in an early study.
Look ahead to buyouts and partnerships
Pfizer is not the only company that may benefit from looking externally for obesity drugs.
Larger drugmakers used acquisitions of smaller businesses, or partnerships with them, to carve out space in the burden loss drug market this 12 months. More corporations could deploy the strategy next 12 months, analysts said.
“There are a bunch of other large-cap pharmas on the list who could do that,” said Cantor Fitzgerald’s Chen.
Swiss company Roche said earlier this month it could buy the privately held U.S. obesity drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing agreement with Chinese biotech company Eccogene to develop an obesity pill.
Novo Nordisk and Eli Lilly have also snapped up smaller obesity drug corporations this 12 months to keep up their dominance available in the market.
Recent weight reduction drug buyouts and partnerships
- Roche in December said it’s going to buy privately held obesity drugmaker Carmot Therapeutics for $2.7 billion.
- AstraZeneca in November said it signed a licensing agreement with Chinese biotech company Eccogene to develop an obesity pill.
- Novo Nordisk in August said it’s going to acquire the privately held obesity drugmaker Inversago Pharma for $1.08 billion.
- Novo Nordisk in August said it’s going to acquire Embark Biotech, which develops obesity and diabetes drugs, for as much as $500 million.
- Eli Lilly in July said it’s going to acquire privately held obesity drugmaker Versanis for $1.93 billion.
In an announcement to CNBC, Novo Nordisk said it has increased its deal with “sourcing and elevating external innovation” to enhance its in-house products and broaden its drug pipeline, especially for diabetes, obesity, heart problems and rare blood disorders.
The corporate also said it’s interested by the “full range of business development activities,” from acquisitions to partnerships on early or late-stage products, with regards to corporations with latest biological drugs, latest potential treatment targets and latest mechanisms of motion, or how a drug works.
Chen said acquisitions or partnerships could be the only way for small- to mid-cap weight reduction drugmakers to meet up with Eli Lilly and Novo Nordisk.
Some smaller corporations have indicated that they’re open to the thought: Altimmune said Dec. 5 that it’s on the lookout for partners to launch and develop its experimental obesity drug pemvidutide.
Shares of Altimmune have jumped greater than 140% since Nov. 30, when the corporate released mid-stage trial data showing that its injectable drug caused 15.6% weight reduction on average after 48 weeks.
Other smaller weight reduction drugmakers include Structure Therapeutics, whose once-daily pill helped obese or obese patients lose as much as 10 kilos of weight on average after a month in an early-stage trial. The corporate is predicted to report mid-stage trial data on its drug in diabetes patients this month and more results on the pill in patients with obesity early next 12 months, Guggenheim’s Fernandez noted.
Still, some greater drugmakers may wait to see larger and later-stage data from smaller corporations before moving to accumulate them. That data may not come out until 2025 or later for a lot of firms, said Fernandez.