2024 expectations for Wegovy, Ozempic, Zepbound

Weight loss drugs exploded into the general public eye this 12 months, and 2024 will convey extra change to the evolving market. 

The medicine skyrocketed in reputation in 2023 as they helped sufferers shed vital weight, regardless of hefty price tags, combined insurance coverage and a handful of unpleasant side effects. 

Demand for the medicine is unlikely to decelerate in 2024, particularly as therapies step by step develop into extra accessible. A lot of Wall Avenue believes the burden loss drug market will solely develop, with some analysts projecting that will probably be worth $100 billion by the top of the last decade. Goldman Sachs analysts count on 15 million U.S. adults to be on weight problems drugs by 2030.

However subsequent 12 months, traders will likely be watching how the dominant gamers out there, Novo Nordisk and Eli Lilly, navigate supply issues plaguing their therapies. Sufferers have been struggling to get their palms on Novo Nordisk’s weight reduction injection Wegovy, its diabetes remedy Ozempic, and Eli Lilly’s diabetes injection Mounjaro.

Analysts count on supply constraints to enhance however observe that the broader problem will take years to resolve. 

Exterior of provide headwinds and the shortage of broader insurance coverage protection for weight reduction medicine, Novo Nordisk and Eli Lilly have a giant 12 months forward of them. 

Novo Nordisk may win approvals for expanded use of Wegovy within the U.S. and Europe. Eli Lilly’s newly accredited weight reduction drug, Zepbound, may garner greater than a billion {dollars} in gross sales in its first 12 months available on the market.

Each corporations are additionally anticipated to launch new knowledge that would present different potential well being advantages of their medicine past weight reduction and diabetes administration, which can improve insurance coverage protection down the road. 

Subsequent 12 months might imply much more to the opposite corporations hoping to hitch what’s to date been a two-horse race to make weight reduction therapies.

New drug knowledge from Pfizer and Amgen, and the potential for extra buyouts or collaborations between bigger corporations and smaller makers of weight problems medicine, may alter the market’s aggressive panorama within the coming months.

The supply problems plaguing Wegovy, Ozempic and Mounjaro are seemingly “the biggest thing” traders will watch subsequent 12 months, Guggenheim analyst Seamus Fernandez instructed CNBC. 

Some analysts stated provide constraints will seemingly persist for years, however count on them to ease in 2024 as Novo Nordisk and Eli Lilly work to develop manufacturing capability for his or her medicine. 

Novo Nordisk throughout its third-quarter earnings name in November stated it’s “looking at significantly scaling our supply” of Wegovy within the U.S. in 2024. TD Cowen analyst Michael Nedelcovych instructed CNBC that the corporate through the name appeared to recommend that such a change would not appear like a giant soar in provide however fairly regular enhancements over time.

Provide may improve extra considerably years from now: Novo Nordisk in November stated it could make investments $6 billion to develop its manufacturing amenities in Denmark, noting it’ll end development from the top of 2025 via 2029. The corporate additionally stated it could spend around $2.3 billion to develop one other manufacturing website in France. 

In the meantime, Eli Lilly stated throughout its third-quarter earnings name in November that provide of Mounjaro has improved in the U.S. even because it stays constrained across the globe.

Executives additionally stated that Eli Lilly is on observe to realize its objective of doubling manufacturing capability for medicine akin to Mounjaro, partially via investments in new manufacturing websites in North Carolina and Indiana.

However Eli Lilly CEO David Ricks stated on the decision that the corporate is “aggressively planning” additional manufacturing buildup for Mounjaro and different medicine. He added that “it’s a problem we work on every day. So we’re not at all happy with the capacity.”

Wall Avenue is keen about Zepbound partially as a result of it might trigger extra weight reduction than Wegovy. Research instantly evaluating the 2, together with an ongoing trial from Eli Lilly, would want to substantiate that.

Outcomes from that trial may come out subsequent 12 months after preliminary knowledge from separate studies inspecting Zepbound as a possible remedy for different well being circumstances, together with heart failure.

Combined insurance coverage protection will seemingly weigh on gross sales of Zepbound and different weight reduction medicine in 2024, however Eli Lilly has already secured some protection for the drug. 

Wegovy made historical past this 12 months when it slashed the risk of great coronary heart issues by 20% in individuals with weight problems and coronary heart illness in a late-stage trial. In 2024, the drug may shake up the pharmaceutical trade once more if U.S. and European regulators resolve to approve it for that goal. 

These potential approvals, which might make Wegovy the primary GLP-1 drug to have an expanded use for coronary heart well being, are a “foregone conclusion” for Novo Nordisk, Cantor Fitzgerald’s Louise Chen instructed CNBC.  

An FDA approval may doubtlessly improve the uptake of Wegovy, encouraging extra weight problems specialists, major care suppliers and cardiologists to prescribe it to eligible sufferers, stated Dr. Eduardo Grunvald, medical director for UC San Diego’s Middle for Superior Weight Administration.

An approval might also put extra strain on U.S. insurers to finally cowl Wegovy and comparable weight reduction therapies, opening the door for broader use.

Eli Lilly can also be studying the cardiovascular advantages of Zepbound in a part three medical trial in diabetes sufferers with elevated cardiovascular threat, and outcomes are anticipated in late 2024. The drugmaker is conducting a similar study in overweight sufferers with heart-health dangers, however outcomes might not come till 2027. 

In the meantime, Novo Nordisk’s different therapies may attain their very own milestones subsequent 12 months.

Novo Nordisk expects to launch knowledge within the first half of 2024 from a late-stage trial inspecting Ozempic as a remedy for kidney failure in diabetes sufferers with continual kidney illness. The corporate hinted that the trial could be a hit when it halted the research a 12 months sooner than deliberate in October based mostly on an interim evaluation.

Novo Nordisk may even launch part three medical trial knowledge on a 25-milligram model of its once-a-day weight loss pill, which makes use of semaglutide, the identical energetic ingredient as in Ozempic and Wegovy. 

That trial is essential as a result of Novo Nordisk is ready to see that knowledge earlier than submitting for approval of the oral weight reduction drug, stated Cowen’s Nedelcovych. He added that in the long run, the supply of weight-loss tablets may enhance capability for his or her injectable counterparts. 

Additionally in 2024, a study following sufferers from a earlier late-stage trial may doubtlessly generate knowledge supporting Wegovy as a remedy for stopping the event of diabetes, Nedelcovych stated.

New knowledge subsequent 12 months will likely be essential to figuring out whether or not Pfizer will get a chunk of the burden loss drug area. The stakes are excessive: CEO Albert Bourla has stated the corporate hopes to capture $10 billion of that market. 

Pfizer axed a twice-daily version of the one weight problems product in its pipeline earlier this month after sufferers taking the capsule misplaced vital weight however had bother tolerating the drug in a mid-stage study. 

Now, the corporate is pinning its hopes on a once-a-day model of the capsule, generally known as danuglipron, which it believes might trigger fewer opposed unwanted effects. Pfizer stated it expects to launch extra knowledge on that model of the drug within the first half of 2024, which is able to assist the corporate resolve whether or not to begin a late-stage research on the capsule. 

Nevertheless, some analysts have raised questions on whether or not the once-a-day model will likely be simpler to tolerate.

“Despite ongoing work, tolerability still appears to be an issue with the product, and it is not clear to us why this will improve” in a part three trial or with a once-daily model, JPMorgan analyst Chris Schott stated in a December observe.

Barclays analyst Carter Gould stated in a December observe that it’s “increasingly apparent” that the corporate should look externally for an weight problems remedy, whether or not that is via an acquisition or partnership, to seize a slice of the burden loss drug market prefer it had hoped.

In the meantime, upcoming knowledge will reveal how critical Amgen’s weight reduction drug portfolio is. Within the first half of 2024, Amgen is slated to publish early stage trial data on an oral weight reduction treatment.

Within the second half of the 12 months, Amgen plans to launch mid-stage trial knowledge on an injectable drug that helped trigger as much as 14.5% weight loss after 12 weeks in an early research.

Swiss firm Roche stated earlier this month it could buy the privately held U.S. weight problems drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing agreement with Chinese language biotech firm Eccogene to develop an weight problems capsule. 

Novo Nordisk and Eli Lilly have additionally snapped up smaller weight problems drug corporations this 12 months to keep up their dominance out there. 

In an announcement to CNBC, Novo Nordisk stated it has elevated its give attention to “sourcing and elevating external innovation” to enrich its in-house merchandise and broaden its drug pipeline, particularly for diabetes, weight problems, heart problems and uncommon blood issues.

The corporate additionally stated it’s within the “full range of business development activities,” from acquisitions to partnerships on early or late-stage merchandise, in the case of corporations with new organic medicine, new potential remedy targets and new mechanisms of motion, or how a drug works.

Chen stated acquisitions or partnerships could be the solely approach for small- to mid-cap weight reduction drugmakers to meet up with Eli Lilly and Novo Nordisk.

Some smaller corporations have indicated that they’re open to the thought: Altimmune stated Dec. 5 that it’s looking for partners to launch and develop its experimental weight problems drug pemvidutide. 

Shares of Altimmune have jumped greater than 140% since Nov. 30, when the corporate launched mid-stage trial data exhibiting that its injectable drug prompted 15.6% weight reduction on common after 48 weeks.

Different smaller weight reduction drugmakers embrace Structure Therapeutics, whose once-daily capsule helped obese or overweight sufferers lose as much as 10 kilos of weight on common after a month in an early-stage trial. The corporate is predicted to report mid-stage trial knowledge on its drug in diabetes sufferers this month and extra outcomes on the capsule in sufferers with weight problems early subsequent 12 months, Guggenheim’s Fernandez famous. 

Nonetheless, some greater drugmakers might wait to see bigger and later-stage knowledge from smaller corporations earlier than shifting to accumulate them. That knowledge might not come out till 2025 or later for a lot of corporations, stated Fernandez.