Pharma’s next big obesity win will be a challenge
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Weight loss jabs are rarely out of the spotlight — and not just because of memes about celebrities’ “Ozempic face”.
Two studies this week found patients who used Novo Nordisk’s Wegovy anti-obesity injection sustained weight loss for up to four years and showed a lower risk of heart disease.
How weight loss drugs, which also include Eli Lilly’s Zepbound jab, might relieve public health burdens is prompting Big Pharma and investors to search for the next breakthrough. The most valuable prize will be the first pill that can deliver similar results to Wegovy and Zepbound. That may be possible — but finding a pill that can be easily manufactured is a bigger challenge.
Companies such as AstraZeneca argue oral treatments, which are generally easier and cheaper to produce, could reach more people and are preferred by patients.
Novo already sells tablets containing semaglutide, the active ingredient in Wegovy as well as Ozempic, a diabetes treatment often prescribed off label for weight loss. The US regulator approved Rybelsus semaglutide tablets in 2019 for adults with type 2 diabetes.
A higher dosage 50mg semaglutide tablet is among the most advanced oral obesity treatments under development. Novo could file for approvals for the daily pill this year — though it has previously warned that any launch would be contingent on manufacturing capacity.
It is already struggling to keep up with demand for injectables. A single 50mg pill would require more than 20 times the amount of semaglutide contained in a once-weekly shot of Wegovy, and is taken daily. In pill form, higher doses are needed to have the same therapeutic effect.
Analysts are carefully watching progress of Eli Lilly’s rival pill — a different and more easily manufactured molecule. Late-stage trial results are expected in 2025. Other pills, including a treatment from Structure Therapeutics, are at earlier stages. Some, such as Pfizer’s twice daily pill, have already fallen by the wayside.
Yet hype around an oral treatment is contributing to big share price moves on results from even very early trials. Novo’s stock hit a fresh record in March after it told investors about results of a phase 1 trial of another potential weight loss pill.
Market leaders Lilly and Novo trade on tech-like forward price/earnings multiples of 58 times and 35 times respectively. That compares with an average of 14 times for US and European rivals that aren’t in weight loss treatments or are years behind.
Pharma’s holy grail of an effective, easily manufactured weight loss pill doesn’t look imminent. Still, any moderation in the frenzy around this drug class is still some way off.
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