Drugmakers target obesity market with deals and development

San Francisco — Pharmaceutical executives from Amgen to Pfizer plan to break into the lucrative obesity market by developing or cutting deals to acquire better drugs that will compete with Novo Nordisk’s Wegovy and Zepbound from Eli Lilly.

At stake is a market now expected to reach at least $100bn by the end of the decade, as consumers flock to the new treatments shown to reduce weight as much as 20%. Drugmakers are testing these drugs for other health benefits such as lowering cardiovascular disease risk and obstructive sleep apnoea.

Amgen has an experimental dual mechanism obesity drug in mid-stage trials it hopes will have fewer side effects with less frequent dosing than Wegovy or Zepbound, chief scientific officer Jay Bradner said at the annual JPMorgan health conference in San Francisco this week.

Wegovy and Zepbound are in a class of drugs called GLP-1 agonists, developed for type 2 diabetes, that reduce food cravings and cause the stomach to empty more slowly.

Bradner said if that differentiation from the market leaders is shown it would give Amgen a footing in the obesity market despite Novo and Lilly’s head start.

“It’s really not too late to be entering the obesity market. There remains massive unmet need. The public health need is not fully addressed by the medicines that have already been approved,” he said. Nearly 115-million US adults and children are obese.

German drugmaker Boehringer Ingelheim is developing an obesity treatment with Danish biotech Zealand Pharma that targets GLP-1 as well as another hormone called glucagon.

“I think we may be the first to bring a GLP-1-glucagon receptor agonist [to market],” said Boehringer head of discovery research Clive Wood.

By targeting glucagon, the drug also expends more energy. “While you’re suppressing appetite, you’re burning more calories,” Wood said. Merck and small biotech Altimmune are developing similar drugs.

Bayer pharmaceuticals head Stefan Oelrich said in an interview at the conference that the company was reluctant to venture into the obesity market on its own, but may look to partner with others with expertise.

Pfizer will focus on drugs in its pipeline and look for licensing deals or to acquire less expensive earlier stage obesity assets, CEO Albert Bourla told reporters at JPMorgan.

“Pfizer’s position is that we believe obesity is a place that we have the ability to play and win. So we will have to play,” he said.

Bourla said some estimates for the eventual size of the obesity market had grown to $150bn a year, up 50% from industry executives’ and analysts’ most optimistic predictions less than a year ago.

In 2023, US demand outstripped supply for the Novo and Lilly weight-loss drugs. Lilly CEO David Ricks said its supply of Zepbound may not be enough to meet demand this year either. Novo Nordisk in August said constraints on Wegovy supplies would most likely extend into 2024.

While the market will be big enough to support several players, ClearBridge Investments analyst Marshall Gordon said entering now would be a challenge as Lilly and Novo have other new obesity drugs in late-stage trials in addition to their blockbuster medicines.

ClearBridge owns shares in both companies, according to LSEG data.

“It’s going to take more than just a ‘me too’ here. Somebody’s going to have another insight that Lily and Novo don’t get to first,” he said.

Reuters