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Bank of America argues that Eli Lilly (NYSE: LLY) and Novo Nordisk (NVO) (OTCPK: NONOF) are “clear leaders” in the market for obesity and diabetes treatments despite encouraging Phase 1 data published by Amgen (NASDAQ: AMGN) recently for his experimental weight loss therapy AMG 133.
Novo (NVO) and Lilly (LLY) are in a race to dominate the US weight loss market, where approximately 74% of adults are classified as obese or overweight, two medical conditions closely linked to type 2 diabetes.
Despite recent supply issues, Novo (NVO) has led the US obesity treatment market since the FDA approved its Wegovy (semaglutide) injection in June 2021 for chronic weight management in adults.
After gaining U.S. approval for its diabetes treatment Mounjaro, Lilly (LLY) accelerated development of the dual GIP and GLP-1 agonist, also known as weight loss tirzepatide, the latest of two phase 3 trials to be concluded by April 2023.
However, Wall Street does not rule out emerging entrants. In early October, shares of Amgen (AMGN) surged after Morgan Stanley issued positive opinions on its experimental weight loss therapy AMG 133, citing multi-billion dollar potential.
However, BofA is more cautious. “While the AMG133 data seemed encouraging based on our conversation with KOLs, Lilly and Novo are still years ahead in development/commercialization in obesity and type 2 diabetes,” wrote analysts led by Geoff Meacham after the Amgen (AMGN) Phase 1 update. this month.
They noted that data from the 133-subject placebo-controlled trial, presented at a medical event on December 3, showed up to 8% weight loss after a single injection of AMG 133 and up to 15% weight loss after three monthly injections.
However, BofA notes that its KOLs remain cautious about the long-term prospects of AMG 133 in terms of tolerability and safety, which they believe require further risk reduction given its novel mechanism of action and its modality.
AMG 133 is a bispecific molecule designed to act as a glucose-dependent insulinotropic polypeptide receptor (GIPR) antagonist and a glucagon-like peptide-1 (GLP-1) agonist. Novo’s semaglutide (NVO) is an analog of the human hormone GLP-1, and Lilly’s next rival tirzepatide (LLY) activates both GIP and GLP-1 receptors.
“We continue to believe that AMG133 requires significantly more risk reduction, not only in obese patients, but also in type 2 diabetic patients given the new MoA and modality,” Meacham et al. ‘crew.
Arguing that around 20% of obese people also have type 2 diabetes, analysts also note patient overlap as a reason for their concerns. Subjects in the Amgen (AMGN) trial for AMG 133 were obese according to their BMI measurements but did not have diabetes or other medical conditions.
Citing the use of fewer doses and less frequent dosing in the trial, analysts still expect a competitive profile for AMG 133 compared to semaglutide and tirzepatide, which have demonstrated weight loss potential. about 14% and 14% – 20%, respectively.
Commenting on the attributes favoring the dominance of Novo (NVO) and Lilly (LLY) in the weight loss market, BofA cites first-mover advantage and evidence supporting the long-term safety/tolerability of their respective treatments.
Despite early data from Amgen (AMGN), analysts are reiterating the buy rating and $390 per share target on Lilly (LLY), arguing that the latter has pulled off one of the most successful trading deployments of the history of the GLP-1 class in Diabetes.
Additionally, BofA predicts that tirzepatide “is on track to become the next $10+ billion mega-blockbuster,” with evidence suggesting a weight loss effect of over 20% consistent with bariatric surgery. , such as gastric bypass surgery.
Read: Morgan Stanley forecast in July that the market for weight loss treatments will reach $54 billion in 2030.
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