The Next Wave of Obesity Drugs: Opportunities and Risks for Investors 🌊

Riding the First Wave: Wegovy® and Zepbound® 🏄

GLP-1 weight loss drugs Wegovy® (semaglutide) and Zepbound® (tirzepatide) from Novo Nordisk and Eli Lilly hit markets like a tsunami, when they were approved in June 2021 and November 2023, due to their unprecedented weight-loss efficacy 🌊 The next waves might not be as colossal, but they still hold potential for investors navigating these waters.

Riding the Wave: Recent Developments

December 2024 brought two consecutive waves of news for investors. First, Eli Lilly unveiled phase 3b SURMOUNT-5 trial results for Zepbound® (tirzepatide), showing a 20.2% superior weight loss (72 weeks, 15 mg, n=741, baseline obese) – well above 13.7% for Wegovy®. Soon after, Novo Nordisk released data from its phase 3 REDEFINE-1 trial for CagriSema (cagrilintide + semaglutide). While the reported 20.4% weight loss (68 weeks, 2.4 mg, n=3,417, baseline 106.9 kg) was strong, it fell short of the anticipated 25%, fueling disappointment and contributing to a ~20% stock price drop.

Taken back-to-back, these developments underscored how quickly sentiment can shift in the fiercely competitive GLP-1 landscape – and just how high investor expectations have become.

Product Portfolios: A GLP-1 Tidal Shift

Recent figures show GLP-1 therapies now make up 80% of Novo Nordisk’s total revenue and 55% of Eli Lilly’s—highlighting how both companies rely heavily on these blockbuster weight loss medications. For Novo Nordisk in particular, semaglutide has become the flagship product that needs replacing or reinforcing once its patents run aground.

Figure 1. Novo Nordisk GLP-1 percentage of sales.
Figure 2. Lilly GLP-1 percentage of sales.

Anchoring Success: Approved Medications

These anchor therapies—Saxenda®, Wegovy®, and Zepbound®—have already reshaped the obesity market by delivering significant weight loss. As one can see in Table 1, looming patent expirations and emerging competition could stir up choppier waters, pushing companies to innovate or risk losing their edge.

CompanyNameGenericDosesAdministrationFDA ApprovalWeight LossPatent Expiration
Novo NordiskSaxenda®Liraglutide3mgDaily Injection 2014~8% (56 weeks)2024
Novo NordiskWegovy®Semaglutide2.4mgWeekly Injection 202114.9% (68 weeks)2026
Eli LillyZepbound®Tirzepatide15mgWeekly Injection 2023 20.9% (72 weeks)2039
Table 1. GLP-1 medications already approved for the treatment of obesity. Despite their success in recharting the obesity-treatment landscape, upcoming patent deadlines mean new challengers—or generic versions—could soon shake up the market once again.

Pipeline Candidates: Innovation on the Horizon

While Wegovy®, Saxenda®, and Zepbound® have already proven the market’s appetite for GLP-1 therapies, a new fleet of candidates is gearing up to reshape the obesity landscape. From dual and triple hormone agonists to next-generation oral formulations, each entry in Table 2 could represent the next wave – if their clinical trials keep delivering smooth sailing.

CandidateSponsorTypeReceptorsAdministration
CagriSemaNovo NordiskPeptides (GLP-1 and Amylin)GLP-1 (Semaglutide) + Amylin (Cagrilintide)Subcutaneous
Amycretin (NNC0487-0111)Novo NordiskPeptide (Amylin)GLP-1, AmylinOral / Subcutaneous
Survodutide (BI 456906)Boehringer IngelheimPeptide (Glucagon)GLP-1, GCGSubcutaneous
Retatrutide (LY3437943)LillyPeptideGLP-1, GIP, GCGSubcutaneous
Orforglipron (LY3502970)LillySMDGLP-1Oral
Table 2. Select pipeline candidates hoping to sail into a highly competitive market by offering even greater efficacy and convenience.

Mapping the Waters: Insights from Clinical Trials

As competition in the obesity-drug space intensifies, clinical trial data can make or break a company’s voyage. Table 3 compares superior weight loss percentages, doses, and timelines across recent mostly phase 3 (and 3b) trials. Notably, candidates like Amycretin and CagriSema are hitting impressive numbers above 20% – but each new wave of data also raises the tide of investor expectations.

CandidateSuperior Weight LossDoseWeeksBaselineDate
Amycretin22.0%20mg3692.7kg2025-01-24
Semaglutide20.7%7.2mg72113kg2025-01-17
CagriSema20.4%2.4mg68106.9kg2024-12-20
Tirzepatide20.2%15mg72Obese2024-12-04
Retatrutide24.2%12mg48BMI>272023-06-26
Survodutide14.9%4.8mg46Obese2023-06-23
Orforglipron14.7%45mg36109kg2023-06-23
Table 3 – Phase 3 and 3b clinical trial results. Note: Amycretin’s 22% was achieved by subcutaneous – not oral – administration in a phase 1b/2a study, while Orforglipron was administered orally.

Plotting the Course: Clinical Trial Highlights

Building on these outcomes, Table 4 charts the finer points of key trials—from participant profiles and dosage regimens to primary outcomes. Navigating this data reveals not only each therapy’s potential but also the crowded seas ahead, where even a small setback can send ripples across the market.

CandidateTrialPrimary OutcomeParticipantsWeeksSample Size
SemaglutideSTEP-1Weight loss vs placeboAdults with obesity or overweight681,961
SemaglutideSTEP-2Weight loss vs placeboAdults with obesity or overweight with type 2 diabetes681,210
SemaglutideSTEP-3Weight loss vs placebo as adjunct to intensive lifestyle interventionAdults with obesity or overweight68611
SemaglutideSTEP-4Weight loss maintenance vs placeboAdults with obesity or overweight68902
SemaglutideSTEP-UPSuperiority of semaglutide 7.2 mg vs placebo on weight lossAdults with BMI ≥30 kg/m² without diabetes721,407
SemaglutideSTEP-UP T2DSuperiority of semaglutide 7.2 mg vs placebo on weight lossAdults with obesity and type 2 diabetes72512
SemaglutideOASIS-1Weight loss vs placeboAdults with overweight or obesity681,102
SemaglutideOASIS-2Weight loss maintenance vs placeboAdults with obesity52921
CagriSemaREDEFINE 1Efficacy and safety of CagriSema vs semaglutide 2.4 mg vs placeboAdults with obesity or overweight and comorbidities without T2D683,400
CagriSemaREDEFINE 2Efficacy and safety of CagriSema vs placeboAdults with T2D and obesity or overweight681,200
CagriSemaREDEFINE 3Cardiovascular outcomes of CagriSema vs placeboAdults with CVD with or without T2DEvent-driven7,000
CagriSemaREDEFINE 4Efficacy and safety of CagriSema vs tirzepatide 15 mgAdults with obesity72800
TirzepatideSURMOUNT-1Superiority of tirzepatide vs placebo on weight lossAdults with obesity or overweight without diabetes722,539
TirzepatideSURMOUNT-2Superiority of tirzepatide vs placebo on weight lossAdults with obesity or overweight with T2D72938
TirzepatideSURMOUNT-3Efficacy of tirzepatide as an adjunct to intensive lifestyle interventionAdults with obesity72669
TirzepatideSURMOUNT-4Weight loss maintenance with tirzepatide vs placeboAdults with obesity52783
TirzepatideSURMOUNT-5Superiority of tirzepatide vs Wegovy® (semaglutide 2.4 mg)Adults with obesity or overweight72741
RetatrutideTRIUMPHSuperiority of retatrutide vs placebo on weight lossAdults with obesity or overweight
SurvodutideVOLITIONSuperiority of survodutide vs placebo on weight lossAdults with obesity or overweight without diabetes46650
OrforglipronATTAINSuperiority of orforglipron vs placebo on weight lossAdults with obesity or overweight36272
Table 4. Clinical Trial Details.

Navigating Choppy Seas: Risks and Opportunities for Novo Nordisk

Despite commanding a leading position in the GLP-1 space, Novo Nordisk faces several challenges that could roil its outlook:

1️⃣ Regulatory Headwinds
  • FDA Approval of Generic Liraglutide (December 2024) 🗜️
    Generic competition will likely squeeze prices and margins.
  • Medicare Price Negotiations (January 2025) 💵
    Wegovy® entering Medicare negotiations adds another layer of pricing pressure.
2️⃣ Market Competition
  • Tirzepatide’s Sleep Apnea Approval 😴
    Lilly’s Zepbound® success in December 2024 in a major comorbidity (sleep apnea) extends its lead.
  • Limited Diversification 🚨
    Novo Nordisk’s heavy reliance on GLP-1 therapies leaves it vulnerable if competitors advance other modalities.
3️⃣ The Patent Cliff Beyond 2032
  • No Clear Ozempic®/Wegovy® Successor 🧑‍🔬
    The pipeline has promising candidates, but no obvious megablockbuster appears ready to replace semaglutide yet.
  • Wegovy® Patent Expiration ⏳
    Losing patent protection could significantly erode market share and revenue after 2032.
4️⃣ Additional Wildcards
  • Potential US–Denmark Conflict 🇬🇱
    Geopolitical tensions, however speculative, can create market uncertainty.
  • Amycretin’s Subcutaneous Results 💉
    Oral formulations lag behind, making the latest data less game-changing than some hoped.

So, Is It Still Worth the Voyage?

Stock Volatility and Lower Multiples (Figure 3) 📉
Novo Nordisk’s share price has plunged ~50% since summer 2024, lowering valuations. These wild fluctuations underscore how difficult it is to extrapolate earnings beyond Wegovy®’s 2032 patent expiration.

Enormous Market 🌍
Over 813 million individuals worldwide are affected by obesity.

Low Penetration 🚀
Only 1 million patients currently use obesity drugs—indicating vast room for growth.

Dueling Giants 🌌
Only Lilly and Novo Nordisk have approved GLP-1 obesity therapies, and both are far ahead of competitors in development and market presence.

Yes, Novo Nordisk’s near-term prospects may look cloudy: the company faces patent cliffs, new competition, and regulatory hurdles. But given the scope of the global obesity crisis and Novo’s proven GLP-1 expertise, the waters ahead might still offer lucrative opportunities—if investors are prepared to weather the volatility.

Figure 3. Time series for price to earnings multiple as well as nominator (price) and denominator (earnings per share). The Novo Nordisk stock price has experienced a sharp 50% drop since the summer 2024.

Disclaimer: This post is for informational purposes only and does not constitute financial advice.

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