Obesity drugs' next wave: These companies could snag 20% of GLP-1 market, analysts say

By Eleanor Laise

Potential competitors to Wegovy and Zepbound aim to help preserve muscle mass, tame side effects

While Eli Lilly & Co. and Novo Nordisk dominate the obesity-drug market, there's a vast field of would-be competitors closing in behind them - and the most successful among those next-wave contenders stand to capture up to 20% of the lucrative market, Jefferies analysts said in a research note Monday.

With GLP-1 drugs set to generate north of $120 billion in annual sales globally by 2031, according to the analysts' estimates, that 20% share could mean close to $25 billion in annual revenues.

The market's power duo won't fade away, in the analysts' view: Lilly (LLY) will hold about 44% market share in the 2030s, the Jefferies analysts forecast, while Novo (NVO) is expected to hang on to about 36% share.

That leaves a healthy slice of the GLP-1 market up for grabs - and the growing competition could eventually help bring down weight-loss-drug prices for patients and payers, the analysts noted.

So which companies are currently best positioned to lead the next class of weight-loss drug developers?

Amgen Inc. (AMGN) is one of the best bets, the Jefferies analysts said, as investors await Phase 2 data on the company's experimental diabetes and obesity drug MariTide. The analysts are looking for the drug to show an average weight loss of about 20% to 24% after one year of treatment, making it competitive with Eli Lilly's weight-loss drug Zepbound. MariTide also stands apart from competitors with potential monthly or even less frequent dosing, a factor that could help control the unpleasant gastrointestinal side effects that often come with weight-loss drugs, analysts said.

Another leading experimental weight-loss drug belongs to Viking Therapeutics Inc. (VKTX), which is working on both oral and subcutaneous versions of VK2735. Like Lilly's Zepbound, VK2735 acts on two different gut hormones, GLP-1 and GIP. The company said last month that it would advance the injectable version directly to Phase 3 trials, accelerating its development timeline. A Phase 2 study of the oral version will start in the fourth quarter, Viking said in late July.

Among the companies racing to develop oral weight-loss drugs, Structure Therapeutics Inc. (GPCR) is another strong contender, in the analysts' view. The company's oral GLP-1 drug, GSBR-1290, is on track to enter a Phase 2b study in the fourth quarter of this year, the Jefferies analysts wrote, and could enter a Phase 3 trial in 2026. Structure said in June that patients taking the drug in a clinical trial lost, on average, 6.2% of their body weight after three months. Pill versions of GLP-1 drugs could help make the treatments cheaper and more broadly accessible and could also serve as maintenance medications once patients achieve their desired weight loss on injectable drugs, analysts have said.

With surging interest in obesity treatments, drugmakers and investors are also focused on drugs that can help preserve the lean muscle that is often lost during rapid weight loss. Scholar Rock Holding Corp.'s (SRRK) experimental drugs apitegromab and SRK-439 stand out among a class of investigational treatments targeting myostatin, a protein that inhibits muscle growth, and could help maintain lean muscle mass in the potentially millions of patients who may use GLP-1 drugs for obesity, the Jefferies analysts wrote.

Zealand Pharma (ZLDPF) could add another novel twist to the weight-loss-drug market with its experimental drug petrelintide. Rather than a GLP-1 receptor agonist, petrelintide is an amylin analog - a type of drug that has been shown to increase feelings of fullness and may have fewer gastrointestinal side effects than GLP-1s. Full data from a Phase 1b trial of petrelintide are expected in November, the Jefferies analysts said.

Looking at earlier-stage experimental drugs, Corbus Pharmaceuticals Holdings Inc.'s (CRBP) CRB-913 stands out, the analysts noted. The drug, which is still in the pre-clinical stage, is a blocker of the CB1 receptor, which plays a role in appetite regulation and metabolism. Novo Nordisk has another CB1 receptor blocker in Phase 2 trials. An update is expected in the third quarter, and could have a significant impact on Corbus's stock, the Jefferies analysts said.

-Eleanor Laise

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08-26-24 1200ET

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