Weight loss set to be pharma's gain

Weight loss drugs  credit: Shutterstock
Weight loss drugs credit: Shutterstock

Three drugs and a host of products in the pipeline are forecast to change obesity treatment, in a market projected at upwards of $100 billion, and with Israeli players too.

Gali Weinreb After many years during which no drugs with significant effects on obesity came to market, the tide has turned. Three drugs have entered or are about to enter the market, and demand is immeasurably greater than supply. Companies are scrambling to keep up. At the same time, a black market has developed, and even people who are not defined as dangerously overweight are using medications not intended for them, with some even boasting about it publicly.

The expected change in obesity treatment is dramatic. A market potentially worth billions of dollars has been created that stretches from nutritionists, support groups, trainers, and supplements to pharmaceutical companies. This change has positive and negative aspects.

The mechanism and the cost

The anti-obesity drugs that have become popular in the past year are based on a mechanism called Glucagon-like peptide-1 (GLP-1). First developed to treat diabetes, GLP-1 is based on a hormone that is also secreted by a healthy body. The GLP-1 receptor agonist encourages insulin secretion, and therefore helps those who have developed insulin resistance to decrease blood sugar levels by enhancing the secretion of insulin.

How does this help with weight loss? We don't know exactly, and this is another proof of the complexity of the metabolic syndrome (the medical term for a combination of diabetes, hypertension, and obesity). These drugs seem to reduce appetite and slow down the passage of food from the stomach to the intestine, thus preserving a feeling of fullness. The side effects of these drugs can be nausea, diarrhea, and vomiting. This in itself can, of course, lead to weight loss, although not all patients suffer from these side effects.

Not all GLP1 agonists affect weight the same way. The two leading drugs are based on a version of GLP1 called semaglutide, developed by Novo Nordisk. Ozempic, an injection approved for the treatment of diabetes since 2017, has been demonstrated in clinical trials to be capable of reducing an average of 3-7% of body weight, when used over a year, which is nice, but not exciting. Wegovy, the same injection with a higher weekly dose, led to a decrease of almost 15% on average in a clinical trial published in 2021-and not just for a lucky few who achieved exceptionally good results; 50% of the patients actually achieved a 15% weight loss.

Another drug on the market is Mounjaro, or by its generic name Tirzepatide, sold by Eli Lilly. At present, it is approved for treatment of diabetes, but it has been submitted for approval for weight reduction. In trials, this drug achieved weight loss of 20% and more, in 50% of patients.

Even during the period of supply shortages , both Ozempic and Mounjaro continued to be consumed not only by diabetics.

The US pharmaceutical market is complicated in terms of the real price to the customer (the end-consumer or the insurance company), but the catalog price is $1,400 per month for Wegovy and $975 for Mounjaro.

Insurers' dilemma: Is obesity a disease?

"The big story is the higher effectiveness of Mounjaro," says Ori Hershkovitz, senior investment manager at Psagot Pareto Pharma Hedge Fund . "In high doses, this drug leads to a 30% weight loss in some patients." If the product is approved as a prescription drug to treat obesity, this percentage decrease will be life-changing.

More drugs are coming to market. Pfizer is working on a drug with a similar mechanism administered orally in pill form, instead of a weekly injection; Amgen is testing a product using more or less the same mechanism, administered monthly or once every three months, and there are more products in the pipeline.

It appears that, at least at present, treatment with these obesity drugs will be permanent, as studies show that most patients who stop taking the drug quickly go back their original weight. This is cause for celebration at the pharmaceutical companies, who love customers for life. For the customers themselves, this is less than happy news.

"Given chronic treatment, revenue from this market is forecast to reach $70 billion in 2030, about half of which will be in the US," says Hershkovitz. "If these numbers are realized, this means 10% of the American pharmaceutical market."

Who will pay for it? And for which patients?

Hershkovitz: "That’s the $100 billion question. There’s no answer yet."

Medicare, the US government insurer, does not finance weight loss drugs, just as it does not finance other products that are considered lifestyle products. But attitudes towards obesity have changed, and there is a powerful lobby demanding that Medicare should recognize obesity as a medical condition.

In any case, the insurance indemnity will probably only be granted to patients in the most severe condition. And what about those who do not fall under that definition? Some will probably persuade their doctors to prescribe the drug anyway (doctors are allowed to prescribe a product off-label at their discretion), and others will buy it on the black market.

Another big question concerns the quality of the food we eat. The drugs actually take the focus off the need to provide the public with healthier food, and from the public's responsibility to consume it. First, the damage is done through industrialized food, then the pharmaceutical companies come along and repair the damage and make a fortune, but the consumer is stuck in the middle, with nausea and poor nutrition.

The good news is that now that an effective drug mechanism for weight reduction has been found, the race to improve the side effect profile of the products has begun. Success may attract more players to the market, who will discover new mechanisms for weight reduction, as obesity is a complex syndrome.

There will be fierce competition in the GLP1 product segment, Hershkovitz says. "Eli Lily and Novo Nordisk are supposed to publish the results of huge clinical trials, which are expected to show that weight loss also leads to an improvement in conditions of cardiovascular disease in patients, and this in order to convince the insurance companies to finance the drug. These are huge trials that cost hundreds of millions of dollars."

The Israeli weight loss drug market contender

Israel has also entered the race for an anti-obesity drug. The most prominent company in Israel is Epitomee, which has developed a capsule that expands in the stomach to create a feeling of fullness. When the company went public in 2020, the market was not yet familiar with Wegovy, Ozempic, and the potential of GLP-1 drugs. Since then, the market has changed dramatically. Over the past year, Epitomee’s share price has dropped 44%, (although this can also be attributed to the state of the stock market in general), and the company’s market cap currently stands at NIS 291 million.

Epitomee’s capsule is in the final stages of obtaining FDA approval, after which it is expected to go on the market as part of a strategic agreement with Nestlé. According to Epitomee VP Business Development and Marketing Safi Landskroner , "The anti-obesity drug market is expected to generate up to $100 billion in the future. It's a huge market where even taking a small share is an achievement. Our product is competitive in several ways: it is administered through swallowing instead of by injection, it is suitable for the population with a BMI of 25 or higher, and the side effects are negligible." The price is also lower than those of the drugs on the market.

How effective is the capsule? In initial trails in Israel, the result was a reduction of approximately 7.5% of body weight, and a Phase III trial is about to conclude shortly.

Nestlé will distribute Epitomee's product exclusively. "If you take into account the entire future obesity treatment market, which includes drugs, alternative foods, digital patient management systems, medical devices and supplements, it is a $200 billion market," says Yu Cheng, Global Head of Metabolic Health at Nestlé Health Science.

Nestlé already has products in this area, mainly meal-replacement shakes and low-calorie shakes - products that were big hits in the weight loss market a few decades ago, then disappeared, made a comeback, and today represent a small part of the market. According to Cheng, users of these products lose about 15% of their weight, and gain about half of the weight back within a few years.

One product developed by the company will be marketed as a natural GLP-1 supplement, although it will not be supported by trials of the same magnitude. Another product category is "Fasting Support" for consumers choosing a weight loss program that includes intermittent fasting.

Commenting on the new drug market, Cheng says: "From our conversations with doctors, it seems to be a double-edged sword. They are very enthusiastic about the potential, but are afraid of misuse, and of the fact that the drugs may not help in the long term. While using the drug, people lose muscle mass, and after all, muscle is also important for health".

Oramed Pharmaceuticals is another Israeli company dealing in weight loss. It has developed a technology that allows for the oral delivery of drugs presently administered only via injection. Among the drugs in its pipeline is an oral GLP-1 capsule, as well as a capsule form of leptin, the hormone known to affect satiety. These products are in initial clinical trials.

Published by Globes, Israel business news - en.globes.co.il - on June 19, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Weight loss drugs  credit: Shutterstock
Weight loss drugs credit: Shutterstock
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