An arrangement of drugs, with an Eli Lilly & Co. logo on a box of insulin medication, is showcased at a pharmacy in Princeton, Illinois (as seen in the attached photograph). Drug manufacturers are currently vying for the opportunity to benefit from the next groundbreaking innovation in the weight loss industry: effective, convenient, and potentially affordable obesity pills. With approximately 40% of adults in the US classified as obese, the development of a successful pill could lead to massive opportunities in the market.
It is still too early to declare a winner, as pivotal data from several pharmaceutical companies is expected later this year. Additionally, one crucial aspect that needs to be addressed is the pricing strategy adopted by major players in the industry. However, at present, an experimental oral drug from Eli Lilly appears to have an advantage over pills from Novo Nordisk and Pfizer, despite the possibility of not being the first to receive approval in the US.
All three manufacturers are focused on developing oral versions of GLP-1s, a type of drug that emulates a hormone created in the gut to reduce appetite. Novo Nordisk’s popular injectable GLP-1 treatments, Wegovy and Ozempic, which triggered a surge in the weight loss industry last year, are administered weekly. The oral pills have the advantage of being easier to manufacture compared to injections, which require single-use pens. Consequently, the oral drugs have the potential to alleviate the supply shortages experienced by injectable counterparts. While pills are generally more cost-effective than injections, it remains uncertain if this will be the case with obesity pills. Wegovy is priced at over $1,300 per monthly package, while Ozempic’s cost amounts to approximately $935. Novo Nordisk also offers a low-dose oral version of semaglutide, which has a similar list price to Ozempic for a monthly package of 30 tablets. This pill, marketed as Rybelsus, is currently approved only for Type 2 diabetes and none of the three drug manufacturers have provided any cost estimates for the new obesity pills.
Novo Nordisk enjoys one significant advantage: the company has already released phase three clinical trial results for its high-dose version of oral semaglutide, which is intended for weight management. Novo Nordisk plans to file for FDA approval later this year. On the other hand, Eli Lilly is currently in the middle of phase three clinical trials for its oral drug, orforglipron, meaning it is likely to enter the market at a later stage.
Despite this, analysts are confident in the long-term competitive edge of orforglipron, particularly after Eli Lilly unveiled phase two clinical trial results that highlighted the drug’s remarkable efficacy. The results showed that overweight or obese patients who took 45 milligrams of orforglipron once a day lost up to 14.7% of their body weight after 36 weeks, compared to 2.3% in the placebo group. These results align with the weight reduction achieved by Novo Nordisk’s pill, albeit within a shorter trial period.
Bank of America analyst, Geoff Meacham, noted that Eli Lilly’s available data on orforglipron “compares quite favorably” to Novo Nordisk’s oral semaglutide, despite taking into account variances in trial design. Cantor Fitzgerald analyst, Louise Chen, expressed her belief that orforglipron could potentially outperform semaglutide in terms of weight loss during a longer trial period. She stated that as patients continue to use these drugs, weight loss tends to increase until it reaches a plateau. Chen predicts that orforglipron may surpass semaglutide in terms of weight reduction. Eli Lilly’s injection tirzepatide demonstrated a weight loss of around 22% after 72 weeks, and Chen hopes that orforglipron will achieve similar results in their phase three clinical trials, which are likely to be conducted over a longer timeframe.
In comparison, Pfizer’s oral GLP-1, danuglipron, is still in phase two clinical trials. Patients with Type 2 diabetes who took a 120-milligram version of danuglipron twice a day experienced an average weight loss of 10 pounds after 16 weeks in one phase two clinical trial. However, it is challenging to make a direct comparison between danuglipron and other oral GLP-1s due to differing patient populations, and the scarcity of long-term data on the drug. Pfizer stated that they are currently conducting further phase two clinical trials on danuglipron and plan to gather more extended data beyond the 16-week mark.
Wells Fargo analyst, Mohit Bansal, believes that Pfizer’s danuglipron will face stiff competition in the oral GLP-1 market, given the strong efficacy data from Eli Lilly’s orforglipron. Additionally, physicians generally prefer prescribing once-daily pills like orforglipron over twice-daily medications like danuglipron. Increased patient compliance is a significant advantage offered by once-daily pills. Dr. John Yoon, an endocrinology professor at UC Davis Health, agrees with this viewpoint, stating that patients are more likely to miss doses if they have to take medication twice a day. Pfizer is also working on developing a once-daily version of danuglipron.
Meanwhile, Pfizer announced that it would discontinue the development of another experimental pill, lotiglipron, which was considered a more attractive GLP-1 in their portfolio due to its once-a-day dosage. As a result, Pfizer’s shares declined by 5% on Monday. The absence of dietary restrictions is a significant advantage shared by Pfizer and Eli Lilly over Novo Nordisk’s semaglutide. Patients who take Novo Nordisk’s oral semaglutide need to consume it on an empty stomach in the morning with no more than four ounces of plain water. They must wait 30 minutes before eating, drinking, or taking other oral medications. This is because Novo Nordisk’s oral semaglutide is a peptide medication that is more challenging for the gut to absorb. In contrast, Eli Lilly and Pfizer offer non-peptide GLP-1s in pill form, which are more easily absorbed and do not require dietary restrictions.
According to Cantor Fitzgerald’s Chen, market research suggests that the dietary restrictions imposed by Novo Nordisk’s semaglutide are viewed negatively by patients, making Eli Lilly and Pfizer’s pills more convenient alternatives. In summary, due to its strong efficacy data, convenient once-daily dosage, and lack of dietary restrictions, Eli Lilly’s orforglipron currently appears to be the front-runner in the weight loss pill market. However, Chen advises to wait for the new data to be unveiled later this year, as it has the potential to alter the current landscape. Ultimately, health experts like Dr. Grunvald believe that the ultimate goal is to have a range of options available to cater to the different needs of individuals.
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