Investing in Obesity Drug Breakthroughs
- BPIQ
- Oct 9, 2023
- 3 min read
In honor of the Obesity week conference, which starts tomorrow:
How can investors profit from weight loss drug (e.g. Wegovy) breakthroughs?
Invest in companies that currently lead in this space
Invest in companies developing new drugs in this space
Large caps
Smid-caps
Leading type-2 diabetes (T2D)/weight loss drugs are GLP-1 agonists, GIP agonists, Amylin analogues,& SGLT-2s
We will focus on GLP-1s for this post
The GLP-1 market was $22B in '22
& projected to reach >$50B by '32 ^1 (See FIG. 1)
Figure 1
GLP-1 market is currently dominated by large caps
One way investors can profit from recent weight loss drug breakthroughs...
Invest in large cap leaders
First,
What's a GLP-1?
A glucogon-like peptide 1 receptor agonist
Many GLP-1s are approved to treat Type 2 diabetes (T2D)
& a few for weight loss too
(See Table 1)
Table 1
Approved GLP-1s^1 ($ = sponsor)
Injections 💉 oral 💊
2x daily 💉
Exenatide (Byetta) (twice daily) AZN (discontinued)
Daily 💉
Liraglutide (Victoza) (daily) NVO
Lixisenatide (Adlyxin) (daily) NVO
Weekly 💉
Semaglutide (Ozempic) (weekly) NVO
Dulaglutide (Trulicity) (weekly) LLY
Exenatide (Bydureon bcise) (weekly) AZN
Oral daily 💊
Semaglutide (Rybelsus) (oral daily) NVO
For obesity weight loss, 2 approved ^:
Liraglutide (Saxenda) (daily 💉) NVO
Semaglutide (Wegovy) (weekly 💉) NVO
Let's look at highlights of the leading companies
NVO
the current leader
Keeps pushing forward...
8/10/23 Wegovy reduced major cardiac (MACE) by 20%
in large 5 yr MACE trial
Recently raised its '23 revenue outlook
based on increasing demand for its GLP-1s
high dose Rybelsus (oral) for weight loss
50 mg vs. 14 mg
Submitting this yr. to FDA for approval
based on recent ph3 data
achieved similar weight loss (~15%) as injectable @ 68 wks ^4 & ^5
But NVO is up 67% over past year
& its market cap is ~$430B
So maybe its too late for $NVO?
& we have downside risk, if supply issues worsen or serious safety issues appear
LLY
Approved for T2D
GLP-1
Dulaglutide (Trulicity) (weekly) LLY
Dual GLP-1 & GIPR agonist
Tirzepatide (Moujaro) (weekly 💉)
But LLY recently dropped their oral GLP-1 (AZD0186)
Based on disappointing data
& previously dropped cotadutide ^7
LLY remains an active player in space
LLY is up 71% over past yr
has a MC of ~$550B
Maybe its too later for LLY too?
Maybe better bets are...
Large pharmas who still could have lots of upside with future obesity drugs
AZN
Approved for T2D
GLP-1
Exenatide (Bydureon bcise) (weekly)
& other T2D drugs
Farxiga (dapagliflozin) (SGLT2 inhibitor)
(Discontinued DPP-4s)
PFE
Lead oral GLP-1: danuglipron
Ph2b obesity trial is fully enrolled
Completing by end of '23
Does not have drug-drug interactions & liver tox issues that killed its other oral GLP-1 ^8
Other large biopharma players in T2D/metabolic space:
AMGN - AMG 133 (GLP + GIP1 antagonist)
BI - e.g., Survodutide (GLP1/GCGR agonist (Ph2)) + GLP-1/FGF21 agonist (pre-clin?) + co-markets Jardiance (SGLT2) with LLY
BMY - sold diabetes business (e.g., Farxiga) to AZN in 2014 but researching NASH currently
GSK - e.g. discontinued GLP-1 Tanzeum (albiglutide))
JNJ - e.g. Invokana SGLT2 inhibitor)
MRK - (e.g., T2D Jenuvia)
NVS - (e.g., T2D Starlix)
SNY - (e.g., insulins (e.g., SOLIQUA) + Lizisenatide (incretin mimetic)
Takeda - (e.g., alogliptin)
Of course, if you follow us (BPIQ), you know that we love smid-caps
Our discussion above is most interesting to us, because
It shows there are a lot of large caps in this space
that could acquire smid-caps or their assets in obesity
Even NVO is acquiring to improve its pipeline in this space
Acquired Inversago Aug '23 for ~$1B
oral CB1R blocker
obesity, T2D, & other metabolic
What smid-caps are developing improved GLP-1s & other weight loss drugs?
Here's our current GLP- smid-cap list, with info about their GLP-1 related candidates:
ALT - Pemvidutide (ALT-801) (GLP-1/glucagon agonist) (subQ) Ph2B NASH/Obesity/T2D $126M
GPCR (GSBR-1290) (GLP-1R agonist) obesity/T2D Ph2A $1.1B
CBAY - (MBX-2982) hypoglycemia Ph2A (GPR119 agonist)(GLP-1 indirectly) $1.3B
NMTR - Vurolenatide (NM-002) (GLP-1 agonist) $1.0M (needs partner)
OPK - OPK88003 GLP-1/glucagon agonist) Ph2 T2D $1.3B
TERN - TERN-601 GLP-1R (oral) agonist Ph1 obesity 344M
VKTX - VK2735 - GLP-1 & GIPR agonist (oral & subQ) Ph1/2metabolic disorder & obesity 1.4B
VTVT - TTP399 - GLP-1R agonist (oral) T2D Ph1/2 $41M (needs partner)
ZEAL - BI456906 - GLP-1/glucagon agonist) Ph2 (Partnered: Boehringer Ingelheim) $818
So... which obesity/GLP-1 tickers are favorites of top hedge funds?
Which of these have upcoming big-mover readouts?
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Footnotes - Resources
^1 Global Market Insights report (May 2023) (available free online at https://www.gminsights.com/industry-analysis/glp-1-receptor-agonist-market)
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