The profitable weight-loss drug market will not stay a duopoly eternally. With billions of {dollars} at stake, this was virtually a assure from the beginning for present market leaders Eli Lilly and Novo Nordisk. However the actuality of the approaching competitors has develop into extra obvious following latest bulletins from rival drugmakers Roche and Viking Therapeutics. Each firms are making progress with experimental remedies that would assist sufferers lose extra weight sooner. Even when right this moment’s incumbents are growing their very own next-generation weight-loss remedies, their updates could also be joined by others within the coming months. Nonetheless, the headlines made an influence. Eli Lilly has misplaced about $123 billion in market worth over the previous two weeks, its worst eight-day decline for the reason that eight days ended March 23, 2020, when the corporate’s market worth fell 15%. Novo Nordisk shares fell about 10% throughout the identical interval, marking its worst eight days since mid-August 2022, when the corporate’s shares fell 11.4%. Even with the latest pullback, each shares have posted large positive aspects this 12 months, with Lilly hovering 38% and Novo rising practically 23%. To make certain, a part of the latest sell-off could also be attributable to buyers taking income after a protracted, regular run. In reality, an analogous pattern is enjoying out amongst Massive Tech shares, which have led the general rally within the inventory market this 12 months. LLY Eli Lilly inventory has gone public to this point this 12 months. Analysts say Indianapolis-based Eli Lilly and Co and Denmark’s Novo Nordisk have a sufficiently big lead within the battle in opposition to weight problems to lock in long-term development. UBS analyst Trung Huynh would not anticipate competitors to enter the market till round 2028. On Monday, UBS raised its forecast for the GLP-1 (glucagon-like peptide 1) market, predicting that the market will develop at a compound annual development fee of 33% by 2029, with gross sales reaching 150 billion by 2029 US {dollars}, up from the earlier forecast of US$125 billion. UBS stated in a analysis be aware that the rationale for the upper estimate is that extra overweight individuals are anticipated to hunt therapy. Different analysts have additionally develop into extra optimistic about the way forward for weight-loss remedies. Rajesh Kumar, analyst at HSBC International Analysis, stated: “As medical knowledge on the chance discount advantages for cardiovascular threat, renal illness and different comorbidities continues to build up, we imagine the tempo of entry and adoption will will speed up. Kumar stated issues about competitors are “honest” however “untimely.” “It is true that many gamers are growing property focusing on weight problems,” he stated. “Nevertheless, the time required to determine medical knowledge, acquisition and manufacturing scale stays a serious barrier to entry.” In the meantime, analysts stated Lilly and Novo are struggling to extend manufacturing capabilities , might proceed to carry surprises. Demand for weight reduction drugs far exceeds provide. Aggressive Scenario Roche’s latest announcement suggests it might develop into the third main firm to enter the anti-obesity drug market. On July 17, the Swiss firm disclosed that CT-996, a once-daily oral GLP-1 remedy obtained by the acquisition of Carmot Therapeutics, helped overweight sufferers cut back a median of 6.1% of their preliminary weight in a Part 1 medical trial. weight in the course of the week. That is a formidable end result. Orforglipron, a once-daily oral GLP-1 drug being developed by Eli Lilly, resulted in 3% weight reduction after 4 weeks. Many individuals have been hoping for an efficient oral GLP-1 therapy since Novo’s Wegovy and Eli Lilly’s Zepbound are each delivered by way of weekly injections. Sufferers usually choose drugs to injections, and drugs are usually cheaper to fabricate. Roche will advance CT-996 into Part 2 trials subsequent 12 months whereas persevering with to review CT-388 by way of weekly injections. It’s also contemplating whether or not mixture therapies make sense, which might broaden the marketplace for the drug. To this point in 2024, Roche ADR leads by 12.5%. Viking Therapeutics shares soared 30% final week after the corporate revealed that VK-2735, an injectable drug that mixes two intestine hormones, GLP-1 and GIP (gastric inhibitory peptide), will transfer straight right into a Part 3 program after assembly with the FDA. . The corporate can be exploring whether or not weight-loss remedies could possibly be delivered simply as soon as a month. BTIG analyst Justin Zelin stated Viking seems “more and more assured” that month-to-month dosing is a chance, and he believes this achievement shall be “the icing on the cake.” Like Lilly and Novo, Viking is growing an oral drug that can enter Part 2 trials within the fourth quarter. Zelin expects to supply extra particulars in regards to the trial on the ObesityWeek convention in San Antonio in early November. He has a purchase ranking on Viking inventory and a $125 value goal, barely above Wall Avenue’s common goal of $114, in keeping with FactSet. Regardless of Viking’s sturdy rebound final week, the inventory nonetheless has room for 89% upside if Zelin’s goal is met. Extra information sooner or later is anticipated to make additional progress within the GLP-1 discipline within the second half of this 12 months, additional boosting the share costs of Lilly and Novo. Two main occasions on the calendar are the European Affiliation for the Examine of Diabetes and Weight problems Week conferences in Spain in two months. HSBC’s Kumar has recognized no less than 125 drug candidates to deal with weight problems in varied phases of growth. The market has heard the most recent from firms like Pfizer and Amgen, in addition to Construction Therapeutics and Altimmune. Plus, Lilly and Novo aren’t sitting nonetheless. Kumar expects fourth-quarter knowledge for Novo’s next-generation drug, CagriSema, to “cut back threat to Novo’s long-term development potential.” The desk beneath lists a few of the medical trial information buyers can anticipate later this 12 months. —CNBC’s Nick Wells contributed to this report.
