The recent setback faced by Pfizer in the development of its obesity pill has opened up new opportunities for biotech companies working on their own oral weight-loss drugs. With the success of injectable weight-loss drugs from Eli Lilly and Novo Nordisk earlier this year, the market for highly effective obesity pills has become a key focus for drugmakers.
Pfizer had projected a $90 billion per year market for these new obesity pills. However, the disappointing results from a Phase 2b trial led the company to halt the development of a twice-daily version of its experimental weight loss pill called danuglipron. The drug’s side effect profile was deemed unacceptable.
Although Pfizer is still working on a once-daily version of the drug, its efficacy results from the trial fell below expectations. This setback may temporarily sideline Pfizer in the obesity-pill market, as Lilly moves forward with its own oral product and Novo works on a high-dose version of its existing weight-loss pill.
While Pfizer’s disappointment may seem like bad news, it actually presents a silver lining for biotech companies developing their own weight-loss drugs. Previously overshadowed by competition from Pfizer, Lilly, and Novo, these biotechs now have a better chance to compete in the market. Moreover, there is speculation that Pfizer may consider acquiring one of these biotechs to overcome its weight-loss pill problems.
Goldman Sachs analyst Chris Shibutani believes that Pfizer is now several years behind its competitors in the development of oral and next-generation anti-obesity medications. He suggests that Pfizer’s business strategy may shift towards acquiring companies in the metabolic space with clinical-stage assets.
In conclusion, while Pfizer’s setback may have dampened its prospects in the obesity-pill market, it has simultaneously created opportunities for biotech companies. The race to develop effective oral weight-loss drugs continues, and it will be interesting to see how companies navigate this evolving landscape.
Pharmaceutical Companies Advance in the Race to Develop Obesity Drugs
Shares of several pharmaceutical companies that are developing oral obesity treatments surged last week as positive trial data was announced. Viking Therapeutics, currently in Phase 1 trials for their drug, saw a 6.5% increase on Friday and a 15.9% increase on Monday. Terns Pharmaceuticals, also in Phase 1 trials, experienced a jump of 17.3% on Friday and a gain of 16.3% on Monday. Structure Therapeutics, in Phase 2 trials, saw a 7% increase on Friday and a 7.7% gain on Monday.
Altimmune’s shares climbed significantly, rising 13% on Friday and 29.7% on Monday, following positive data from a Phase 2 trial of their weight loss drug.
Experts are starting to speculate which of these drugs Pfizer may be interested in acquiring. In a recent note, Oppenheimer analyst Jay Olson suggested that Viking may present an appealing portfolio with attractive valuation to Pfizer. Phase 1 data on Viking’s pill is expected early next year.
The race to develop effective obesity treatments has made biotech companies with these drugs in development particularly attractive to potential buyers. Just this week, Roche Holding announced a $2.7 billion acquisition of Carmot Therapeutics, a privately held U.S. biotech company working on several anti-obesity treatments, including a once-daily pill currently in Phase 1 trials. Last month, AstraZeneca also made an announcement to collaborate with Chinese biotech Eccogene on the development of a once-daily obesity pill.
Pfizer has historically focused on internal pipeline for their obesity efforts but recently they have been exploring potential acquisitions. However, their internal drugs for this category have faced significant challenges. Earlier this year, Pfizer discontinued an alternative to danuglipron called lotiglipron due to concerns over liver toxicity.
In conclusion, the race to develop effective obesity treatments is heating up as multiple pharmaceutical companies experience positive trial results. Acquisitions and partnerships in this space are becoming increasingly common as companies vie for a slice of the lucrative obesity market.
