The fiery "miracle pill for weight loss" GLP-1: What's next?

The new generation of GLP-1 drugs has received a lot of attention due to their remarkable effects in treating diabetes and weight loss, and even the 2023 Breakthrough Drug of the Year award was awarded to GLP-1 products by Science magazine.

Since 2023, Novo Nordisk's Wegovy and Eli Lilly's Zepbound have taken advantage of the GLP-1 wind to trigger a "weight loss industry" frenzy. In 2023, their stock prices have risen by 54.56% and 61.33% respectively, and in just over a month this year, their stock prices have further increased by 13.69% and 20.95%.

GLP-1 drugs and weight loss have become the hottest topic in healthcare worldwide. In a recent report, analysts at Jefferies predicted that global sales of GLP-1 drugs are expected to increase from $2.4 billion in 2023 to $165 billion by 2030.

Recently, Jefferies Investment Bank had a conversation with Tomohiro Tanaka, associate professor in the Department of Internal Medicine and Department of Endocrinology and Metabolism, Graduate School of Medicine, Nagoya City University.

In the conversation, Tomohiro spoke highly of the current lineup of approved GLP-1 agonists, saying that these drugs are easy to use and that the injectable form does not hinder their use, and that Eli Lilly and Novo Nordisk will still have the majority of the share, and that there is an urgent need to address the lack of capacity and increase supply.

Tomohiro believes that if a new generation of oral treatments for GLP-1 drugs is approved, the overall demand in the market is expected to rise further, and as more research shows that GLP-1 drugs can protect the health of people with obesity, GLP-1 agonists may one day treat more diseases, such as heart failure and chronic kidney disease.

In Tomohiro's view, the GIP and GLP-1 dual receptor agonists and GIP receptors, GLP-1, and GCGR triple agonists developed by Eli Lilly's tirzepatide (Chinese name: tirpatide) can achieve better weight loss by treating multiple receptors and reduce the incidence of nausea and vomiting.

Tomohiro points out that in Japan, people may use these drugs not just for weight loss but for cosmetic purposes, and the emergence of more convenient oral products is likely to further stimulate this demand:

Rybelsus, the only approved oral GLP-1 agonist, needs to be taken on an empty stomach and patients cannot eat or drink for 30 minutes after taking the drug. Eli Lilly's Ph3 oral drug candidate, Orforglipron, has no restrictions.

The issue of supply is a top priority for manufacturers of "diet pills".

Tomohiro pointed out that there is an opinion that some patients may prefer to take oral medications, and that all currently approved products are injectables that are injected once a week, but are very convenient to use, so the biggest issue now is not the issue of injection or oral, but the issue of supply, and hopefully over time, the supply issue will be properly resolved.

According to JPMorgan Chase, Wegovy's average weekly prescription volume in the U.S. increased by 148% year-on-year this year, while Ozempic's average weekly prescription volume increased by 43% year-on-year, and pharmaceutical companies had to expand production capacity to meet the market's explosive demand growth.

Previously, Novo Nordisk's controlling shareholder, Novo Holdings, spent $16.5 billion to acquire Catalent, one of the largest outsourced manufacturing providers in the pharmaceutical industry, with three of its bases being resold to Novo Nordisk for $11 billion to accelerate production at its Wegovy and Ozempic.

Eli Lilly also announced an additional $1.6 billion investment in a new manufacturing facility in Indiana and a $450 million investment in Research Triangle Park in North Carolina to increase production capacity for increin products, including tirpatide.

Analysts noted that both companies have deep product pipelines, including oral drugs in development and more potent injectable drugs. They are able to continue to introduce new treatment options to meet market demand, and the growth space and competitive barriers for both companies look strong in the coming years.

Oral products are more acceptable to patients

Tomohiro points out that oral products may be more acceptable to patients than injectables, in particular, once-a-day oral products without any food restrictions could be very successful, and the emergence of oral therapies in the future will stimulate the demand for cosmetic products:

For example, patients with relatively mild obesity but metabolic complications are more likely to receive oral therapy if they are unable to receive injection therapy.

Rybelsus, the only currently approved oral GLP-1 agonist, needs to be taken on an empty stomach and patients cannot eat or drink for 30 minutes after taking the drug. Eli Lilly's Ph3 oral drug candidate, Orforglipron, has no restrictions.

We very much welcome the non-GLP-1 inhibitor oral weight loss drug candidates being developed by the likes of Japan's Shionogi Pharmaceutical and Otsuka Pharmaceutical. They don't have to be as effective as GLP-1. But it's important for clinicians to have a range of different therapies to choose from.

According to Tomohiro, the development of oral versions of dual-receptor agonists and triple agonist-targeted therapeutics is not easy:

Multi-receptor agonist injections have been developed so quickly because they are peptides, and in the case of peptides, it is relatively easy to adjust the structure by substituting amino acids, however, it is not so straightforward to design an oral small molecule that can selectively agonize multiple receptor types.

More diverse treatment goals

Tomohiro noted that Eli Lilly's tirpatide (Mounjaro, for diabetes, and Zepbound, for obesity) has been shown to lose 20% of body weight over 48 weeks, and that the proportion of weight loss is determined by determining what percentage of weight is needed for weight-loss therapy to have an impact on complications:

Studies have shown that losing 7% of body weight can largely eliminate the risk of non-alcoholic fatty liver disease (NAFLD) and non-alcoholic steatohepatitis (NASH), and in the case of diabetes, losing 15% of body weight may eliminate the need for diabetes treatment, but for obesity-related gastroesophageal reflux disease, 15-20% weight loss is required to reduce symptoms.

In this sense, Tomohiro believes that the goals of treatment need to be tailored to each patient's situation, depending on the patient's weight, body mass index and complications at the time of initiation of treatment:

Bariatric surgery provides a useful benchmark for the use of weight loss medications. Sleeve gastrectomy can reduce the patient's body weight by 20-30%, while Roux-en-Y gastric bypass can reduce body weight by 30-45%. Thus, the efficacy of double- and triple-acting agonists may be similar to that of sleeve gastrectomy, which is usually sufficient to treat most of the negative effects of obesity.

Tomohiro points out that there are not many patients in Japan who weigh more than 100 kilograms, so for most patients, losing 10-15% of their body weight may be enough. As a result, oral products such as Eli Lilly's Orforglipron (discovered by Chugai Pharma and currently in the Ph3 trial phase) may be a good fit for the Japanese market.

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