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biotechnology company Viking therapy has become a strong potential entrant or acquisition target in the emerging weight loss drug market.
Viking is just one of several companies vying to join this growing field.Some analysts say the market may be worth $100 billion by the end of this century.
Virgin aims to compete with injectable drugs Eli Lilly and Company and Novo Nordisk. Despite high prices and barriers to insurance coverage, their treatments have sparked a gold rush in the weight-loss drug industry over the past year.
Some Wall Street analysts say Viking’s experimental obesity treatment could be “best in class.” In a mid-stage trial, an injectable version of Viking’s drug appeared to promote weight loss better than Eli Lilly’s Zepbound.
Viking saw data from the study for the first time on Tuesday, sending its shares soaring 120%. The encouraging performance makes the company an impressive potential player in the market, and there may be room for more entrants in the coming years.
Goldman Sachs project It is estimated that by 2028, 10 million to 70 million Americans will be taking diet pills. Eli Lilly and Novo Nordisk have also struggled to provide adequate supplies of treatments, giving other companies a chance to gain market share.
The new data also makes Viking a more attractive deal target for larger companies trying to enter the field or expand obesity treatment products.
It’s too early to tell whether Viking’s drug will have any advantage over existing or developing weight-loss treatments. It’s difficult to compare treatments without going head-to-head in the same clinical trial.
Viking still needs to conduct late-stage studies on its drug and may not launch an injection until later this decade. The small company faces obstacles entering the market, such as producing enough of the drug to meet growing demand. But being acquired by a larger company may help solve some of these problems.
Data shows Viking’s drug may have advantage
Viking’s Phase 2 trial tracked more than 170 overweight or obese patients. They received varying doses of the injected drug or a placebo.
The trial did not directly compare Viking’s treatment with other drugs. Still, many analysts are comparing Viking’s shot to Eli Lilly and Company’s Zepbound, largely because they work in the same way.
An injection pen for Eli Lilly and Company’s weight loss drug Zepbound is on display in New York City on December 11, 2023.
Brendan McDermid | Reuters
Both drugs mimic two naturally occurring gut hormones called GLP-1 and GIP. GLP helps reduce food intake and appetite. GIP also suppresses appetite and may also improve the way the body breaks down sugar and fat.
Meanwhile, Novo Nordisk’s weight-loss injection Wegovy only targets GLP-1.
Analysts were particularly impressed by patients who lost weight after taking the highest dose of Virgin’s drug. Patients who received the 15 mg weekly dose lost an average of 13.1% of their body weight after 13 weeks compared with those who took placebo.
Of note, there was no evidence of a plateau in weight loss at week 13 at any dose. This suggests that by extending patients’ treatment, “further weight loss may be achieved,” Viking Chief Executive Brian Lian said during a conference call with investors on Tuesday.
William Blair analyst Andy Hsieh wrote in a note on Tuesday that Viking’s drug data showed that among experimental weight loss drugs that have been approved and are in Phase 2 trials, Viking Drug data shows “best in class”. Hsieh noted that after 12 weeks in the Phase 3 clinical trial, Eli Lilly and Company’s Zepbound resulted in about 7% less weight compared to placebo.
Viking’s drug also appears to be ahead of Novo Nordisk’s weight-loss injection Wegovy, according to a separate report Tuesday from BTIG analyst Justin Zelin.
Based on chart data from Phase 3 trialAnalysts estimated that Wegovy reduced body weight by about 5% at 13 weeks compared with placebo.
Meanwhile, several analysts estimated that certain doses of Eli Lilly’s experimental injectable retalglutide resulted in weight loss of 9% to 13% relative to placebo at 13 weeks, based on chart data from one study. Interim trial.
Most adverse side effects that patients experience after starting Viking drugs are mild or moderate. Many of these cases are gastrointestinal disorders, which are common in all weight loss and diabetes treatments.
About 20% of patients taking 15 mg of Viking’s drug stopped treatment early in the study. In comparison, about 14% of subjects taking a placebo stopped taking it early during the trial.
But Jefferies analyst Akash Tewari wrote in a note on Tuesday that Viking’s trial used faster “titration” of patients. This refers to increasing the dose a patient takes over time until a target dose level is reached.
He said Virgin may be able to make its drug more tolerated by patients in future trials by slowing down the titration rate, which could make the treatment less effective.
The Vikings still have a long way to go
While the data is compelling, Virgin still has a lot of work to do before it can compete in the weight-loss drug market.
The company plans to meet with the U.S. Food and Drug Administration later this year to discuss clinical development plans for the treatment.
Viking Chief Executive Brian Lian told investors on a conference call Tuesday that the company may conduct another Phase 2 trial that could last six to nine months.
Jefferies’ Tewari estimates Viking’s treatment won’t be available until 2029 or later. Late-stage trials of the drug are likely to be lengthy. Eli Lilly’s Phase 3 study of Zepbound lasted two and a half to three years.
The late entry of Viking’s drug is one reason Tewari doesn’t think the company will meaningfully break into Eli Lilly’s market.
The pharmaceutical giant is also likely to launch a slew of other weight loss treatments in the coming years that may offer advantages over Zepbound, whether they offer more weight loss or convenience. These include Eli Lilly and Co.’s experimental drug orforglipron and the much-hyped retarglutide, which mimics three gut hormones instead of two.
Photo taken on March 5, 2021, at the Eli Lilly and Company pharmaceutical plant in Branchburg, New Jersey.
Fresh Mike | Reuters
Analysts at Deutsche Bank added in a note on Tuesday that “producing treatments at scale to meet huge demand has proven to be no easy task.” This, they said, sets the stage for Eli Lilly and Novo Nordisk Provides a “defensive moat” against competitors.
The Vikings acknowledged the hurdle during a conference call Tuesday. Lian said the company has sufficient supply of the drug to support its clinical trials, but its production capacity is not sufficient for commercial rollout.
But Lian noted that the company is “spending a lot of time” evaluating multiple manufacturing processes to understand “what’s the fastest, what’s the highest yield, what’s the cheapest and what’s the most scalable.”
Cooperation and acquisitions are all on the table
Viking’s impressive data could make it an attractive target for acquisition or partnership by a major pharmaceutical company. This could give Viking the commercial and manufacturing capabilities it needs to compete in the weight-loss drug market.
William Blair’s Hsieh added that big pharmaceutical companies can maximize the value of Viking’s treatment because they can better handle rebates and reimbursements for weight-loss drugs.
Some analysts expect high interest in Viking from other companies as well.
“For any big pharma or biotech company that wants to enter the obesity market but doesn’t currently have a drug, this is likely to come up,” said Oppenheimer analyst Jay Olson. ‘s shopping list. There are a lot of them out there.” CNBC.
He added that a company could “pay a sizable premium for Viking and then buy it at a relatively low price compared to the potential of this class of drug.” As of Friday, Viking had a market capitalization of more than $8.5 billion.
This photo shows an injection pen for Novo Nordisk’s weight loss drug Wegovy taken on November 21, 2023 in Oslo, Norway.
Victoria Cresty | Reuters
Viking is an attractive trade target, and not just because of the new numbers. Wall Street is eager for the company to release early trial results of its oral weight-loss treatment this season.
BTIG analysts noted that both versions of the drug have IP coverage beyond 2040, which “bodes well” for potential collaboration discussions.
Viking is also developing other drugs, including a promising oral treatment for a certain liver disease. Eli Lilly, Novo Nordisk and other drugmakers are also racing to see if their drugs can treat the same condition.
Virgin has not revealed any details of discussions with potential partners. But the company “has been open to partner discussions from day one, so we’re always opportunistically evaluating anything that’s presented to us,” Lian said during Virgin’s fourth-quarter earnings call last month indicated above.
Other drugmakers have sought deals over the past year to carve out space in the weight-loss drug market.
Swiss Roche says it will purchase Acquired privately held US obesity pharmaceutical company Carmot Therapeutics for US$2.7 billion.AstraZeneca signed License Agreement Partnering with Chinese biotech company Eccogene to develop weight-loss drugs.
Even Novo Nordisk and Eli Lilly have acquired smaller obesity drug companies this year to maintain their dominance in the market.
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