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Anti-obesity drug makers Novo Nordisk and Eli Lilly have a significant lead over their competitors, but given the vast and valuable market, rivals are still trying to get in on the action. Bank of America analyst Jeff Meacham is very bullish on the opportunity, calling it “unprecedented” given the obesity epidemic and the significant interest investors have shown in the space to date. It is said that Meacham was one of the first to predict that the sector’s peak sales could reach $100 billion, but many analysts now believe the market could be even larger. I’m predicting it. According to the Centers for Disease Control and Prevention, approximately 42% of adults in the United States are obese, a costly disease associated with a wide range of other medical conditions, including heart disease, stroke, and cancer. Novo Nordisk, which makes Ozempic and Wegovy, estimates that around 800 million people worldwide are obese. Competition is coming This week, both Zealand Pharma and Viking Therapeutics reported that they will drive advances in experimental treatments in this broad category, indicating that competition is coming, and following this news, ‘s stock price soared. Zealand shares soared 35% on Monday after strong results for liver disease drug sulbodutide. The treatment has received priority designation from the Food and Drug Administration and is also being studied for obesity. VKTX YTD Mountain Biking’s Year-to-date Stock Price Later, Viking stock more than doubled in Tuesday trading, reporting a year-to-date gain of more than 300% following the company’s announcement of its GLP-1/GIP receptor. The paced agonist, VK2735, met all major goals in Phase 2 clinical trials. Patients enrolled in the study lost approximately 13% of their body weight after 13 weeks. This compares very favorably to other drugs in this class. Perhaps even more reassuringly, there was no sign of weight loss plateauing, and the drug was well tolerated, with few patients discontinuing treatment. At the same time, shares of Novo and Lilly fell in Tuesday trading. The competition “doesn’t matter to Eli Lilly or Novo Nordisk, but it certainly raises the bar for both companies,” Yuri Khojamilian, chief investment officer at Tema ETF, said in an interview. The Tema Cardiovascular and Metabolic ETF (HRTS) is up 12% year-to-date and owns Novo, Lilly, and Viking. REGN YTD Mountain Regeneron Stock Price Year-to-date Cardiovascular and metabolic diseases are areas that have long been ignored by big pharma, but big pharma is paying attention to new developments, which Khojamilian said are “very interesting.” Ta. Additionally, he doesn’t think this will be a winner-take-all situation, so Tema is investing in other early-stage companies that are developing weight-loss drugs and taking other approaches to treating obesity. These include Biohaven, a company researching drugs to prevent the loss of muscle mass associated with the use of GLP-1 drugs, and Regeneron, which is considering genetic approaches to obesity treatment. Developing drugs in this area is not easy, with mixed success. ”[T]”Mixed results for Pfizer’s two assets and several smaller new entrants (such as Structure Therapeutics and Altimmune) highlight the clinical challenges in this field,” Meacham said. I wrote about this in my recent research notes.especially to continue to swell [as] We’re seeing progress on access and redemptions.” However, both Structure and Altimmune traded higher on Tuesday’s Viking news. Other companies working in this area and related therapies include Turns Pharmaceuticals and Scholar Rock. AstraZeneca and Roche are entering the field through acquisitions. Jeff Jonas, portfolio manager at Gabelli Funds, believes there are other ways investors can benefit from the growing interest in anti-obesity drugs, including drug distributors like McKesson. are also included and will benefit from increased sales volumes. He was an investor in contract drug manufacturer Catalent, which was acquired by Novo Nordisk’s parent company in a deal aimed at increasing Novo’s manufacturing capabilities. Portfolio managers say Novo has about two years of duopoly in this space before competition from Lilly intensifies and the list price of GLP-1 drugs, which currently exceed $1,000 per month, “collapses.” . Many questions remain regarding the treatment of obesity. For example, patients taking these drugs find that their weight gradually returns when they stop taking the drug. But will these people want to continue taking these drugs for the rest of their lives? It’s not clear. Especially considering that side effects such as nausea, constipation, and diarrhea may force some patients to discontinue use. Next-generation drugs in development may aim to alleviate some of these symptoms, and if they do so, patients may benefit as well. But for now, demand for the drug is so high that companies are selling everything they can make, so it doesn’t really matter if patients stop treatment. BofA’s Meacham recently shared her IQVIA script data for the week ending February 16th with clients. The data showed strong growth in GLP-1 prescriptions, up 22% year-over-year. Meacham said he expects GLP-1 drugs to account for 31% share of the diabetes market in the first quarter, up from 25% in the first quarter of 2023. He estimated that 14% of prescriptions for GLP-1 drugs were written, 86% for obesity and 86% for diabetes. “We remain bullish on payer adoption and broader acceptance of obesity, so we continue to expect growth above consensus in this space,” Meacham wrote. Meacham said Zepbound, which was approved by the FDA as an obesity treatment in late 2023, is rapidly gaining market share, giving Lilly a 46% share of the total GLP-1 market. According to him, Lilly already has a 38% market share in the obesity field, even though it has only been on the market for 13 weeks. And Lilly has an opportunity to further improve its position, capturing about 47% of all new prescriptions written. What’s next for Viking? As for Viking, his Tema’s Khojamilian said part of Tuesday’s huge stock price increase could be due to another big pharma company, such as Merck or Pfizer, considering an acquisition. This is said to be fueled by speculation. That can often be the strategy in this area. Kojamilian noted that manufacturing these drugs is a difficult process, and Viking also needs to build a sales force to compete with established companies like Novo and Lilly. But as stock prices rise, it’s become a more expensive proposition. Gabelli’s Jonas said he was skeptical of Pfizer’s interest, given that the company is already busy consolidating past acquisitions and has significant debt. But he said if Viking’s stock price soars, it could allow him to invest in his company’s growth. Commenting on the rise in Viking’s stock price, William Blair analyst Andy Hsieh said: increases in Medicare reimbursement or commercially sponsored health plans). Hsieh said competitors could challenge Lilly and Novo by competing on price. “We also believe that one of the peculiarities of the U.S. health care system, which gives pharmacy benefit managers significant power to shape prescribing patterns through the creation of formularies, is an opportunity for non-first-in-class competitors. We emphasize that it has the potential to give
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