The weight-loss drugs market could be worth up to $144 billion within six years. And a bevy of pharma stocks could cash in, rivaling kingpins Novo Nordisk and Eli Lilly.
Novo's Wegovy and Lilly's Zepbound currently lead the obesity treatment market. This year, the duo is expected to generate a combined $14.34 billion in sales, according to FactSet. By 2029 — the latest year for which there are estimates — they could bring in $39.1 billion.
That leaves plenty up for grabs as companies like Viking Therapeutics, Roche, Amgen and others work on next-generation weight-loss drugs. These experimental treatments include potentially more potent or less frequent shots and daily pills. The latter could scale up rapidly and, experts say, offer a possible maintenance option for patients who don't want to regain the weight they lost with injections.
"This is a really huge market," CFRA analyst Sel Hardy told Investor's Business Daily. "There are more than 1 billion people in the world living with obesity. That number is expected to increase by another 500 million in the next 10 years."
So, with billions in potential sales on the line and an increasingly crowded field, which pharma stocks stand a chance of making the biggest dent in the weight-loss drugs market?
- Altimmune
- Amgen
- AstraZeneca
- Eli Lilly
- Novo Nordisk
- Pfizer
- Roche
- Structure Therapeutics
- Terns Pharmaceuticals
- Viking Therapeutics
Can Pharma Stocks Benefit From Improved Shots?
The current leading weight-loss drugs mimic the GLP-1 hormone to improve feelings of satiety and blood sugar markers, and slow how fast the stomach empties itself. Eli Lilly's Zepbound also targets a second hormone called GIP to lead to even stronger weight loss. GIP has been tied to fat accumulation and metabolism.
But the future of obesity treatment will focus on greater weight loss and easier administration.
This is where Amgen and Viking hope to enter the field. Viking's VK2735 uses the same mode as Zepbound: It mimics both GLP-1 and GIP. Amgen is taking a different tact. Its MariTide mimics GLP-1 and puts the brakes on GIP. Both could be monthly injections. AstraZeneca also has a weekly drug in testing that uses the same mode of action.
Amgen expects to have further results from a midstage study of MariTide later this year. In early testing, patients given MariTide lost up to 14.5% of their body weight over 12 weeks. As a weekly shot, Viking's drug helped people lose up to 14.7% of their weight over 13 weeks.
Both pharma stocks have risen markedly on their results.
AstraZeneca also has an injectable drug in testing called AZD6234. This drug targets a hormone called amylin, which plays a role in regulating blood sugar and energy balance.
Altimmune is nearing final-phase testing for its drug, pemvidutide. Pemvidutide, a weekly shot, works by targeting GLP-1 and glucagon receptors. In Phase 2 testing, patients lost an average 15.6% of their body weight over 48 weeks.
Weight-Loss Drug Leaders
But Novo and Lilly aren't resting on their laurels. The companies are also looking to outdo their own blockbuster drugs.
Lilly is testing an injected drug called retatrutide. Retatrutide targets GLP-1, GIP and glucagon receptors. In June 2023, Lilly said patients who took the weight-loss drug for 24 weeks lost an average 17.5% of their body weight. At 48 weeks, that reached 24.2% weight loss.
Novo is also testing myriad weight-loss drugs, including a weekly shot that uses the same approach as Zepbound and Viking's VK2735.
Investors in pharma stocks are also closely eyeing its weekly shot called CagriSema, which targets GLP-1 and amylin. Patients with type 2 diabetes who took CagriSema for 32 weeks lost up to 15.6% of their body weight, Novo said in August 2022.
Pharma Stocks In Play As Drugmakers Zero In On Pills
The next big advent in weight-loss drugs will be oral medications. Pills are easier to manufacture as they don't require an auto-injector, pen or syringe and vial. They don't require refrigeration, opening up their use in developing markets. It's also easier to adjust the dosage of pills.
And, for some patients, pills are less intimidating.
"They want to pop the pill with their coffee and drive to work," Structure Therapeutics Chief Executive Raymond Stevens told IBD. "They're not wanting needles."
Even weight-loss drug leaders Lilly and Novo are working on oral approaches.
Lilly has a GLP-1-focused drug in testing called orforglipron. Pharma stock Novo has several pills in development, including a drug called amycretin. Patients given orforglipron for 36 weeks lost up to 14.7% of their weight. Amycretin recipients lost 13.1% of their body weight over 12 weeks.
Oral Weight-Loss Efforts
Pharma stocks Roche and Pfizer are in play as the companies also work on oral GLP-1 drugs. Pfizer is working to find the right dosage for its danuglipron, while Roche stock jumped in July after its CT-996 helped patients lose 7.3% of their body weight over a month.
Viking is also studying an oral version of its injectable drug, VK2735. Over 28 days, patients who took the Viking pill lost 5.3% of their body weight, on average. Chief Executive Brian Lian expects pills to have a place in maintaining weight loss after more potent injections.
Structure Therapeutics has several pills in development, including drugs that target GLP-1, amylin, GIP, glucagon receptors and apelin. Apelin has been shown to help regulate blood pressure and glucose metabolism, among other things.
Terns also has pills in testing that target GLP-1, GIP and THR beta. Activating the THR beta receptor could help regulate weight loss. But the pharma stock trades under 10 a share.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
