Race is on to develop new generation of weight-loss drugs

Surging demand and tight supply for a new class of obesity drugs has sparked a race among several of the world’s largest pharmaceutical companies to develop rival medications for a market projected to be worth $50bn in annual revenues by the end of the decade.

Eli Lilly, Amgen, Pfizer and Regeneron are among the companies aiming to compete with market leader Novo Nordisk in a category which analysts say is rapidly becoming a healthcare priority and could produce several blockbuster obesity treatments this decade.

Nordisk’s treatment Wegovy, which a late-stage trial showed produced 15 per cent average weight loss in patients’ body weight, has proven so popular since its launch in 2021 that the drug has been in short supply for almost a year.

Mounjaro, a similar medication already marketed by Lilly for treating diabetes but which is expected to get a green light from regulators next year for obesity, is also scarce at least in part because of off-label use by patients with obesity.

Many physicians have in the past been reluctant to prescribe drugs to tackle obesity because of the stigma surrounding a condition some thought could be treated with diet and exercise and dangerous side effects caused by previous generations of diet pills.

But the effectiveness of the new drugs, which in some cases can produce weight loss equivalent to bariatric surgery, is changing attitudes among physicians and the public.

“This new class of medicines essentially regulate the hunger-satiety cycle of people and enable doctors to treat obesity like a medical condition,” said Evan Seigerman, an analyst at BMO Capital Markets.

“They are generating a lot of excitement among investors because the total addressable market is so huge,” he said.

More than four in 10 American adults are clinically obese, according to the Centers for Disease Control and Prevention, which estimated the annual medical costs of the condition at almost $173bn in 2019. JPMorgan recently forecast the global obesity drug market would be worth more than $50bn by 2030.

Wegovy and Mounjaro are known as glucagon-like peptide 1 (GLP-1) agonists, which were developed to help control blood sugar levels in people with diabetes. These drugs target an area of the brain that regulates appetite and can lead to substantial weight loss in patients when administered as a once-weekly injection under the skin.

Novo’s Wegovy has a leading position in the market but analysts say supply bottlenecks caused by robust demand and manufacturing hiccups have handed Lilly an opportunity to compete aggressively when Mounjaro is approved to treat obesity. Over the medium-to-long term, the market for this new class of GLP-1 drugs is expected to become fiercely competitive as rival pharmaceutical companies launch new therapies.

Last month Amgen published early-stage trial data showing patients on a high dose of its drug candidate Amgen 133 lost almost 15 per cent of body weight in just 85 days. This result was achieved on a monthly dosing regime, rather than the weekly pace that is required for Wegovy and Mounjaro.

Amgen 133 works in a similar fashion to Novo and Lilly’s obesity drugs as an GLP-1 agonist, which acts to suppress a patient’s appetite. But in a break with these medications, the antibody also binds to and blocks a hormonal receptor called glucose-dependent insulinotropic peptide (GIP).

Some researchers believe blocking the secretion of these hormones in the gut after eating can decrease energy intake and increase expenditure of energy, thereby leading to weight loss.

“Hitting two targets at once with a very specific type of directionality, putting the brakes on one while putting the gas on the other, is actually biologically important,” said Saptarsi Haldar, Amgen’s vice-president of research overseeing cardiometabolic diseases.

Amgen forecasts this mechanism will enable its drug to provide more durable weight loss than GLP-1 agonist drugs.

In early December Amgen released data from its phase 1 trial showing patients maintained double-digit percentage reductions in body weight — 11.2 per cent for those on the high dose — up to 150 days after the last of their three doses of the drug.

“The weight loss persists even after patients are not taking the drug anymore, and the reason for that is that they are eating less calories and eating smaller meals. It’s a habit that they learn,” said Joel Neutel, principal investigator on the Amgen clinical trial.

Analysts have said Amgen 133 shows promise, but have cautioned the company will need to replicate these results in second- and third-stage trials to get the drug approved. If it is successful, the company will still be several years behind Novo and Lilly, they said.

Pfizer, which is flush with cash following its success developing Covid-19 vaccines and treatments, said on December 12 it plans to push ahead with a late-stage trial of an oral GLP-1 drug with potential to treat diabetes and obesity. At an investor event, the company touted the potential to claim $10bn in annual sales by 2030 — with analysts noting that a once-a-day pill may gain a competitive advantage over weekly or monthly injections.

Regeneron is at an even earlier stage of development. The New York-based biotech has done extensive genetic research to find a variation on a gene that protects people from obesity.

Aris Baras, senior vice-president of Regeneron Pharmaceuticals, said the GPR75 gene has the “largest effect size” of a genetic variant ever discovered: people who have the variant are at least 60 per cent less likely to become obese.

The company thinks the gene is so promising that it is trying three different ways to create a drug for it.

Internally, it is working on an antibody, which could be delivered as an injection. Regeneron has also partnered with AstraZeneca for its expertise in chemistry, to make a pill, and with Boston-based Alnylam Pharmaceuticals, to use its novel way of silencing genes, called RNA interference, to produce an injection that could be taken as little as twice a year.

Baras said the GLP-1 drugs from Novo Nordisk and Eli Lilly have been a “fantastic development for the field”. But another drug or a combination of drugs have the potential to increase weight loss, and could come without GLP-1 side effects such as nausea.

In an animal study, which he stresses are imperfect models, the changes to the GPR75 gene made them lose at least as much weight as if they were taking the GLP-1 drugs.

“The current medicines that exist for obesity are good, they are not perfect. They are still going to leave substantial residual weight. It would be great to have more beneficial weight reduction,” Baras said.

Health experts say the development of effective medicines to treat obesity that do not appear to have dangerous side effects is helping to ease concerns over weight loss drugs. But there are hurdles to overcome in terms of persuading insurers to cover the cost of treatments, with prices for Wegovy listed at $1,349 per month.

Medicare, the federal US insurance scheme for people aged over 65 years and with disabilities, does not cover obesity treatments. Many private insurers do not cover the treatments or place restrictions on access.

“The real hurdle that’s going to have to be addressed is getting coverage by insurance companies for these medications,” said Patrick O’Neil, an expert on obesity at Medical University of South Carolina. “That is the next cultural shift that is needed.”