December 4, 2023

When Novo Nordisk launched weight loss drug Wegovy last year it recruited US rapper and actress Queen Latifah to front a publicity campaign aimed at tackling the stigma that often surrounds obesity treatments.

Fast-forward a year and there is little sign of public reluctance to embrace the drug, which a late-stage clinical trial showed produced average weight loss in patients of 15 per cent of their body weight. Instead, the Danish company has become a victim of its own success. Surging demand and manufacturing constraints have caused widespread shortages of Wegovy.

Scarcity of the drug, which has the generic name semaglutide and is an appetite suppressant, has forced Novo to temporarily halt marketing and rethink its manufacturing strategy. It has also provided an opportunity for Eli Lilly, Amgen and several biotech companies developing similar obesity-busting drugs to try to catch up in a market that analysts forecast could be worth $50bn a year by 2030.

“This blowout launch, with a more or less vertical uptake curve, changes your robustness for handling issues,” Lars Fruergaard Jørgensen, Novo’s chief executive, told the Financial Times.

He said Novo did not anticipate the huge demand for Wegovy, basing its projections on the slower ramp-up of sales of Saxenda, its earlier obesity drug that helped patients lose about 5 per cent of their body weight. The company aims to fix its production problems by the end of the year, enabling it to do more to promote Wegovy in the US and launch in several European countries, said Jørgensen.

The scramble to launch a new generation of drugs to tackle obesity — a disease that affects about 650mn people worldwide — has caused unease among some critics, who warn about their potential misuse and side effects. But most health experts say the drugs should have a very positive impact on patients with obesity, a disease that can have devastating health implications and that largely goes untreated.

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Obesity is linked to health problems such as heart disease, stroke, kidney disease and high blood pressure. But less than 1 per cent of the estimated 71mn US adults with obesity used weight loss medication from 2012 to 2016, according to a report by the US Government Accountability Office.

Doctors say people increasingly view obesity as a disease to be treated rather than some sort of moral lapse or laziness, in part because of the new medications.

“Right now, we’re seeing really dramatic demand for semaglutide. There are patients of mine that I can’t get on the drug,” said Dr Fatima Stanford, an obesity medicine specialist at Massachusetts General in Boston, a teaching hospital affiliated with Harvard University. “There needs to be a focus on ramping up supply.”

Stanford said patients are more receptive to taking medicines now than in the past because of their good safety profiles and higher efficacy rates, with the newest dugs capable of achieving weight loss equivalent to bariatric surgery. But there is a need to educate doctors and private and public insurance schemes to provide reimbursement and boost uptake, she said.

Analysts forecast obesity medication is the next blockbuster pharma category, equivalent to the revolution in treating high blood pressure in the 1980s.

“With conservative pricing assumptions, we believe global obesity sales could reach more than $50bn in 2030. This would lift obesity from a $2.4bn category to a top-12 therapy area by global spending,” said Mark Purcell, analyst at Morgan Stanley.

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“Unlocking the Obesity Challenge: a >$50bn market”, a report co-authored by Purcell, forecasts the market will be driven by several factors: more awareness that obesity medication can save lives; removal of supply constraints; social media’s role in popularising the drugs; and greater focus on weight loss in tackling diabetes.

A four-week course of Wegovy has a list price of $1,349 a month, although patients with insurance that cover the drug pay less. Given that patients must stay on the drugs for life to ensure they do not put weight back on, obesity medications should generate stable income over long periods for drugmakers, say analysts.

Morgan Stanley forecasts Novo Nordisk and Lilly will capture about 40 per cent of the market, as they develop and launch up to a dozen obesity medicines currently in development between them. Several other biotech companies — Amgen, Altimmune, Zealand Pharma, Hanmi, Regor Therapeutics, Sciwind Biosciences and vTv Therapeutics — are at earlier stages of drug development.

Last month, the US Food and Drug Administration granted fast-track designation to Lilly’s weight loss drug Tirzepatide — a move the company expects should lead to its approval next year. It successfully launched a formulation of this drug, which it branded Mounjaro, in May to treat type 2 diabetes at a list price of $974 for four weekly doses.

SVB Securities predicts high demand for Tirzepatide when it is approved for obesity and warns that it could face similar supply constraints as Wegovy. The investment bank forecasts Tirzepatide will generate about $26bn in annual sales in 2030, with about one-third of this amount related to treating diabetes and two-thirds for obesity.

Tirzepatide and Wegovy are in a class of drugs known as glucagon-like peptide 1 (GLP-1) agonists, which were initially developed to help control blood sugar levels in people with diabetes. These drugs target an area of the brain that regulates appetite and can lead to substantial weight loss in patients when administered as a once-weekly injection under the skin.

“I think [Mounjaro] will be a big opportunity for the company,” said David Ricks, Lilly chief executive, citing the successful launch of the drug for treating diabetes and its potential as a weight loss drug.

“We’ve never seen a drug that had more than 20 per cent weight loss before and that puts us in a unique category similar to gastric bypass surgery.”

In April, Lilly reported Mounjaro caused average loss of 15 per cent of body weight on a low dose to 22.5 per cent on a higher dose in a late-stage clinical trial. Patients taking Wegovy in a separate trial funded by Novo Nordisk lost about 15 per cent of their body weight on average, with a third of patients losing more than 20 per cent.

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Social media endorsements by celebrities have become a driver of demand for weight loss medication, a trend that some doctors warn is worsening the Wegovy supply crunch and can lead to misuse. Last month Tesla founder Elon Musk attributed his weight loss to “fasting” and “Wegovy” while weight loss strategies using Novo’s Ozempic — which is the same medication but approved to treat diabetes and available in lower doses — have gone viral on TikTok.

“It’s a concern with all medications that get the social hype and are misinterpreted as a wonder drug,” said Dr Robert Kushner, professor at Northwestern University Feinberg School of Medicine. “They are not approved for thinness or just losing weight.” 

Kushner said these prescription medicines required monitoring for tolerability and potential side effects. But he said their effectiveness was driving a “paradigm shift” in how physicians are treating obesity.

Weight loss medications have a chequered history in the US. The FDA has previously withdrawn authorisation for several drugs such as fenfluramine and dexfenfluramine due to potentially life-threatening side effects. Trial results show Wegovy and Tirzepatide can cause nausea, diarrhoea, vomiting, constipation and stomach pain. Both drugs also come with warnings they could increase the risk of thyroid cancer, although so far this has only been found in animal studies.

Dr Beverly Tchang, an endocrinologist and assistant professor of clinical medicine at Weill Cornell Medicine, said regulatory oversight is much better than it was in the 1960s when a previous generation of weight loss drugs was approved.

Lars Fruergaard Jørgensen
Lars Fruergaard Jørgensen, chief executive of Novo Nordisk

“We do have a better safety profile because of the regulation.”

Tchang said some older doctors remained reluctant to prescribe weight loss drugs for obesity, in part because of concerns over side effects with previous medications. But she said the main barrier to their adoption was the reluctance of private and public insurers to cover the cost.

Jørgensen said the company still has to have the conversation with government payers — in the US and Europe — about how obesity cannot always be solved with diet and exercise, and that the drugs can save healthcare systems money. In the US, Medicare does not cover obesity treatments but Jørgensen said he believed that would change as people taking the drugs retire and expect continued coverage.

“If you have had a long productive life and paid taxes, you also expect to have access to that. So I think it is a matter of time.”


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