These drugmakers are chasing Eli Lilly and Novo Nordisk | Wilnesh News
The lucrative weight-loss drug market won’t remain a duopoly forever. With billions of dollars at stake, this was almost a guarantee from the start for current market leaders Eli Lilly and Novo Nordisk. But the reality of the coming competition has become more apparent following recent announcements from rival drugmakers Roche and Viking Therapeutics. Both companies are making progress with experimental treatments that could help patients lose more weight faster. Even if today’s incumbents are developing their own next-generation weight-loss treatments, their updates may be joined by others in the coming months. Still, the headlines made an impact. Eli Lilly has lost about $123 billion in market value over the past two weeks, its worst eight-day decline since the eight days ended March 23, 2020, when the company’s market value fell 15%. Novo Nordisk shares fell about 10% during the same period, marking its worst eight days since mid-August 2022, when the company’s shares fell 11.4%. Even with the recent pullback, both stocks have posted big gains this year, with Lilly soaring 38% and Novo rising nearly 23%. To be sure, part of the recent sell-off may be due to investors taking profits after a long, steady run. In fact, a similar trend is playing out among Big Tech stocks, which have led the overall rally in the stock market this year. LLY Eli Lilly stock has gone public so far this year. Analysts say Indianapolis-based Eli Lilly and Co and Denmark’s Novo Nordisk have a big enough lead in the fight against obesity to lock in long-term growth. UBS analyst Trung Huynh doesn’t expect competition to enter the market until around 2028. On Monday, UBS raised its forecast for the GLP-1 (glucagon-like peptide 1) market, predicting that the market will grow at a compound annual growth rate of 33% by 2029, with sales reaching 150 billion by 2029 US dollars, up from the previous forecast of US$125 billion. UBS said in a research note that the reason for the higher estimate is that more obese people are expected to seek treatment. Other analysts have also become more optimistic about the future of weight-loss treatments. Rajesh Kumar, analyst at HSBC Global Research, said: “As clinical data on the risk reduction benefits for cardiovascular risk, renal disease and other comorbidities continues to accumulate, we believe the pace of access and adoption will will accelerate. Kumar said concerns about competition are “fair” but “premature.” “It’s true that many players are developing assets targeting obesity,” he said. “However, the time required to establish clinical data, acquisition and manufacturing scale remains a major barrier to entry.” Meanwhile, analysts said Lilly and Novo are struggling to increase manufacturing capabilities , may continue to bring surprises. Demand for weight loss pills far exceeds supply. Competitive Situation Roche’s recent announcement suggests it could become the third major company to enter the anti-obesity drug market. On July 17, the Swiss company disclosed that CT-996, a once-daily oral GLP-1 therapy obtained through the purchase of Carmot Therapeutics, helped obese patients reduce an average of 6.1% of their initial weight in a Phase 1 clinical trial. weight during the week. This is an impressive result. Orforglipron, a once-daily oral GLP-1 drug being developed by Eli Lilly, resulted in 3% weight loss after 4 weeks. Many people have been hoping for an effective oral GLP-1 treatment since Novo’s Wegovy and Eli Lilly’s Zepbound are both delivered via weekly injections. Patients often prefer pills to injections, and pills tend to be less expensive to manufacture. Roche will advance CT-996 into Phase 2 trials next year while continuing to study CT-388 via weekly injections. It is also considering whether combination therapies make sense, which could expand the market for the drug. So far in 2024, Roche ADR leads by 12.5%. Viking Therapeutics shares soared 30% last week after the company revealed that VK-2735, an injectable drug that combines two gut hormones, GLP-1 and GIP (gastric inhibitory peptide), will move directly into a Phase 3 program after meeting with the FDA. . The company is also exploring whether weight-loss treatments could be delivered just once a month. BTIG analyst Justin Zelin said Viking appears “increasingly confident” that monthly dosing is a possibility, and he believes this achievement will be “the icing on the cake.” Like Lilly and Novo, Viking is developing an oral drug that will enter Phase 2 trials in the fourth quarter. Zelin expects to provide more details about the trial at the ObesityWeek conference in San Antonio in early November. He has a buy rating on Viking stock and a $125 price target, slightly above Wall Street’s average target of $114, according to FactSet. Despite Viking’s strong rebound last week, the stock still has room for 89% upside if Zelin’s target is met. More news in the future is expected to make further progress in the GLP-1 field in the second half of this year, further boosting the share prices of Lilly and Novo. Two major events on the calendar are the European Association for the Study of Diabetes and Obesity Week conferences in Spain in two months. HSBC’s Kumar has identified at least 125 drug candidates to treat obesity in various stages of development. The market has heard the latest from companies like Pfizer and Amgen, as well as Structure Therapeutics and Altimmune. Plus, Lilly and Novo aren’t sitting still. Kumar expects fourth-quarter data for Novo’s next-generation drug, CagriSema, to “reduce risk to Novo’s long-term growth potential.” The table below lists some of the clinical trial news investors can expect later this year. —CNBC’s Nick Wells contributed to this report.
