The market for miracle diet pills
The world’s waistline keeps expanding, so anti-obesity drugs look increasingly promising, says Dr Mike Tubbs
Reality television and Instagram star Kim Kardashian, plus Elon Musk, are among the many celebrities who are reputed to have used Wegovy, a new drug that helped obese patients lose an average of 35 pounds in clinical trials. Elon Musk said it had helped him lose 30lbs. Last month the National Institute for Health and Care Excellence (Nice) recommended that Wegovy should be made available on the NHS to thousands of people with body mass indices (BMIs) of 30 or more through a specialist weight-management service.
Obesity is attracting the attention of biopharmaceutical companies as it is becoming a major cause of infirmity and death worldwide. The global prevalence of obesity tripled between 1975 and 2016. Obesity is defined as a BMI of 30 or more; those with BMIs between 25 and 30 are classed as overweight. The US has 36.5% of adults in the obese category, closely followed by Saudi Arabia with 31.7%. The respective figures for Canada and Australia are 30.5% and 30.6%. European countries range from 20% to 30%, with Britain at 27.9%.
The World Health Organisation (WHO) says that 1.4 billion adults are obese or overweight, with 2.8 million adults dying every year as a result. There is therefore a large unmet medical need for effective weight-loss drugs. Morgan Stanley predicts that the market for anti-obesity drugs will expand from $2.4bn in 2022 to $54bn in 2030, with the US accounting for around 60% of the market. Anti-obesity drugs would therefore become a top-12 global therapy by 2030. That is exciting the interest of several big pharma companies.
There are two reasons for the renewed interest in anti-obesity drugs. The first is a landmark obesity study which is showing that weight-management medicines reduce the risk of heart attacks, strokes and cardiovascular deaths by 17% or more. The second is the availability of a new generation of medicines such as Wegovy and other promising drugs in pharmaceutical companies’ pipelines, all of which enable patients to achieve large reductions in weight with relative ease.
A diabetes specialist weighs in
Wegovy is made by Denmark’s Novo Nordisk, the world’s leading producer of drugs for diabetes. I recommended Novo Nordisk in MoneyWeek in October 2020. At that time Novo only had one weightloss drug on the market: Saxenda, a version of Victoza, Novo’s diabetes drug. It required daily injections and was far less effective than Wegovy. At that time Novo’s shares stood at DKr445 (around £50); they are now worth DKr1,122, largely because of the success of Wegovy and another weight-loss drug called Ozempic.
Wegovy only requires weekly self-administered injections using Novo’s special, painless pre-filled injector pen. Wegovy is a GLP-1 drug, meaning it is a glucogen-like peptide similar to the natural GLP-1 hormone released when you eat food. GLP-1 drugs both regulate blood sugar (which is why they are useful for diabetics) and make the brain think that the patient is less hungry, reducing the desire for food.
Since diabetics are often overweight, this reduction in appetite is very beneficial. Novo’s first GLP-1 was
Victoza, which is prescribed for type-2 diabetes and also helps diabetics control their weight. Victoza needs daily injections with an injector pen so Novo developed Ozempic, also for type-2 diabetes, which only requires weekly injections and is therefore much more convenient.
Novo has also developed Rybelsus, which became the only oral GLP-1 on the market. It is a once-a-day tablet for diabetics with similar effects to Ozempic for controlling blood sugar and reducing weight. However, Ozempic has some additional benefits since, in clinical trials, it has been shown to reduce the risk of heart attacks or strokes.
Wegovy was approved by America’s Food and Drug Administration (FDA) in June 2021 and demand quickly outstripped supply; people who could not obtain Wegovy for weight loss started using Ozempic instead. This contributed to Ozempic’s sales nearly tripling from 2020 to 2022 and making it Novo’s bestselling drug last year. Wegovy is similar in structure to Ozempic but is given in higher doses.
Weight loss drugs such as Wegovy for obese and overweight patients are part of a rapidly expanding market which analysts estimate could be worth $50bn by 2030. This large market size is not surprising since around 70% of US adults are currently living with excess weight or obesity.
The success of Wegovy and Ozempic has naturally led other big pharma companies to develop similar
“GLP-1 drugs regulate blood sugar and make the brain think you are less hungry”