The lucrative weight-loss drug market won't remain a duopoly eternally. With billions at stake, that was all but guaranteed from the beginning for current leaders Eli Lilly and Novo Nordisk. But the fact of the approaching competition has grow to be more tangible following recent announcements from rival pharmaceutical corporations Roche and Viking Therapeutics. Both corporations have made progress with experimental treatments designed to assist patients shed more kilos, faster. Their news is prone to be followed by more in the approaching months as today's incumbents develop their very own next-generation weight-loss treatments. Still, the headlines have taken their toll. Over the past two weeks, Eli Lilly has lost about $123 billion in market value, posting its worst eight-day decline because the eight days ending March 23, 2020, when its stock fell 15%. During the identical period, Novo Nordisk shares fell about 10%, the worst eight days since mid-August 2022, when its stock plunged 11.4%. Despite that recent pullback, each stocks have posted massive gains this yr: Lilly is up 38%, Novo is down nearly 23%. Some of the recent selling can have been because of investors taking some profits after an extended, regular run. In fact, an identical trend is obvious within the megacap technology stocks which have led the broader stock market's gains this yr. LLY YTD-Mount of Eli Lilly shares year-to-date. Analysts say Indianopolis-based Lilly and Denmark's Novo have a large enough lead within the anti-obesity category to make sure growth for a very long time. UBS analyst Trung Huynh doesn't expect competition to enter the market until around 2028. Even then, rivals shall be limited to not more than 10% of the market by 2029, Huynh said. On Monday, UBS raised its forecast for the GLP-1 (glucagon-like peptide 1) market, predicting it can grow 33% annually through 2029 and reach $150 billion in revenue by 2029, in comparison with a previous forecast of $125 billion. The reason for the upper estimate is the expectation that more individuals with obesity will seek treatment, UBS said in a research note. Other analysts have also grow to be more optimistic concerning the way forward for weight reduction treatments. “As clinical data accumulates on cardiovascular risk, kidney disease and other risk-reducing comorbidities, we believe the pace of access and adoption will increase,” said Rajesh Kumar, an analyst at HSBC Global Research. Kumar said concerns about competition are “valid” but “too early.” “It is true that many players are developing assets targeting obesity,” he said. “However, the time required to build clinical data, access and manufacturing scale remains the key barrier to entry.” Meanwhile, analysts say Lilly and Novo could proceed to deliver positive surprises as they work to ramp up their manufacturing capacities. Demand for weight-loss drugs far exceeds supply. How the competition stacks up: Roche's recent announcements suggest the corporate could grow to be the third major company to enter the anti-obesity drug market. On July 17, the Swiss company announced that CT-996, a once-daily oral GLP-1 drug it acquired through the acquisition of Carmot Therapeutics, helped obesity patients lose a median of 6.1 percent of their baseline weight in 4 weeks in a Phase 1 clinical trial. That was a formidable result. Orforglipron, a once-daily oral GLP-1 drug that Lilly is working on, had shown 3 percent weight reduction after 4 weeks. Many had hoped for an efficient oral GLP-1 treatment, since each Novo's Wegovy and Lilly's Zepbound are given as a once-weekly injection. Patients typically prefer taking a pill over a shot, and tablets are likely to be inexpensive to supply. Roche will advance CT-996 right into a Phase 2 trial next yr while continuing to review CT-388, which is given by a weekly injection. The company can also be considering whether combination therapies make sense, which could expand the marketplace for the drugs. Roche's ADRs are up 12.5% to this point in 2024. VKTX YTD-mount of Viking Therapeutics shares year-to-date. Viking Therapeutics rose 30% last week after the corporate announced following a gathering with the Food and Drug Administration that VK-2735 – an injectable drug that mixes two gut hormones, GLP-1 and GIP (gastric inhibitory polypeptide) – would move directly right into a Phase 3 program. The company can also be exploring whether the weight-loss drug might be administered as little as once a month. BTIG analyst Justin Zelin said Viking seems “increasingly confident” that monthly dosing is feasible, a feat he said could be “icing on the cake.” Like Lilly and Novo, Viking is working on an oral drug that can move right into a Phase 2 trial within the fourth quarter. Zelin expects to supply more details on the trials on the ObesityWeek conference in San Antonio in early November. He rates Viking stock a buy and has a $125 price goal, barely above Wall Street's $114 average price goal, in line with FactSet. Even with Viking's sharp rise last week, the stock has 89% upside potential if it hits Zelin's goal. More News to Come More progress in GLP-1 is predicted within the second half of the yr, which is able to further boost Lilly and Novo shares. Two big events on the calendar are a European Association for the Study of Diabetes conference in Spain in mid-September and ObesityWeek two months later. HSBC's Kumar has identified at the very least 125 drug candidates to treat obesity in various stages of development. The market has heard news recently from players like Pfizer and Amgen, in addition to Structure Therapeutics and Altimmune. And Lilly and Novo aren't sitting still, either. Kumar expects a fourth-quarter release of Novo's next-generation drug, CagriSema, to “defuse Novo's long-term growth potential.” Below is a table of a few of the clinical trials that investors expect to listen to news about later this yr. —CNBC's Nick Wells contributed to this report.
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