Picking the next public and private winners in the obesity drugs race
September 14, 2024
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The race to develop and market GLP-1 drugs to treat obesity represents one of the most significant trends shaping the biopharmaceutical industry today.
In a groundbreaking new report, Morningstar Institutional Equity Research and PitchBook Institutional Equity Research analysts collaborated to predict how the next wave of obesity drugs will unfold across both public and private markets.
The frontrunners
Novo Nordisk and Eli Lilly's market capitalizations have each been catapulted as they dominate the rapidly growing market for obesity drugs.
Sales of GLP-1 drugs hit $36 billion in 2023 and are on track to surpass $50 billion this year. Morningstar analysts predict this market will balloon to more than $200 billion by 2031 as Novo and Lilly expand their reach and as new challengers come to market.
This growth is likely to come despite heavy discounting as new firms try to gain share (and as Novo and Lilly try to gain broader insurance coverage) with lower prices.
New entrants poised in public markets
Amgen is well positioned to be one of the next big firms entering the market, as it is already planning to move to phase 3 trials.
Roche acquired two key drug candidates from private firm Carmot earlier this year, and early efficacy data looks competitive with next-generation programs from Lilly and Novo.
AstraZeneca's obesity pipeline got a boost from a license agreement with private firm Eccogene in 2023, and Pfizer's own danuglipron could advance quickly to pivotal trials if the firm gets a handle on once-daily dosing.
Expect M&A for obesity biotechs
Any big pharma company that doesn't already have an obesity pipeline is likely considering buying one—meaning VC-backed players should see robust exit opportunities.
Emerging obesity drug development startup raises have been dominated by megadeals and sourcing Asia-based assets. Merck and J&J may be most likely to make significant deals—perhaps targeting smaller public firms with recent positive data, like Viking or Structure Therapeutics.
Metsera and Hercules stand out as acquisition targets among private firms, and the newly announced BioAge and MBX Biosciences IPOs also reflect the strong interest in obesity investing.
For more analysis, download the free report here: Obesity Drugs: The Next Wave of GLP-1 Competition
In a groundbreaking new report, Morningstar Institutional Equity Research and PitchBook Institutional Equity Research analysts collaborated to predict how the next wave of obesity drugs will unfold across both public and private markets.
The frontrunners
Novo Nordisk and Eli Lilly's market capitalizations have each been catapulted as they dominate the rapidly growing market for obesity drugs.
Sales of GLP-1 drugs hit $36 billion in 2023 and are on track to surpass $50 billion this year. Morningstar analysts predict this market will balloon to more than $200 billion by 2031 as Novo and Lilly expand their reach and as new challengers come to market.
This growth is likely to come despite heavy discounting as new firms try to gain share (and as Novo and Lilly try to gain broader insurance coverage) with lower prices.
New entrants poised in public markets
Amgen is well positioned to be one of the next big firms entering the market, as it is already planning to move to phase 3 trials.
Roche acquired two key drug candidates from private firm Carmot earlier this year, and early efficacy data looks competitive with next-generation programs from Lilly and Novo.
AstraZeneca's obesity pipeline got a boost from a license agreement with private firm Eccogene in 2023, and Pfizer's own danuglipron could advance quickly to pivotal trials if the firm gets a handle on once-daily dosing.
Expect M&A for obesity biotechs
Any big pharma company that doesn't already have an obesity pipeline is likely considering buying one—meaning VC-backed players should see robust exit opportunities.
Emerging obesity drug development startup raises have been dominated by megadeals and sourcing Asia-based assets. Merck and J&J may be most likely to make significant deals—perhaps targeting smaller public firms with recent positive data, like Viking or Structure Therapeutics.
Metsera and Hercules stand out as acquisition targets among private firms, and the newly announced BioAge and MBX Biosciences IPOs also reflect the strong interest in obesity investing.
For more analysis, download the free report here: Obesity Drugs: The Next Wave of GLP-1 Competition
Karen Andersen, CFA
Strategist, Biotechnology, Morningstar
Kazi Helal, Ph.D.
Senior Analyst, Biotech, PitchBook
Damien Conover, CFA
Director of Equity Research, North America, Morningstar
Strategist, Biotechnology, Morningstar
Kazi Helal, Ph.D.
Senior Analyst, Biotech, PitchBook
Damien Conover, CFA
Director of Equity Research, North America, Morningstar
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