Deepak Verma
Global drug sales are expected to hit ~$30B by 2020, according to Cowen, with Novo Nordisk ( NVO ) and Eli Lilly (NYSE: LLY) capable of controlling the market.
But the Wall Street firm also tells investors not to just look at other pharmas with weight loss products in the pipeline, but look for companies that are developing medical devices and digital therapies to pave the way in the obesity treatment space.
In the report of Nov. 18, Cowen said that treatment of obesity is in its new form. Only 30% of obese people are diagnosed and treatment is very limited. The company added that medical treatment is only used by 1%-2% of obese patients.
In a June survey, Cowen found that obesity specialists reported seeing medication as appropriate for ~60% of their patients. This compares to 20% for surgery. A survey of doctors and payers conducted in October by Cowen found that they agree that the number of patients without diabetes who take weight loss drugs has increased significantly.
Pharmacotherapy
Novo Nordisk (NVO) and Lilly (LLY) want to expand the use of obesity drugs, and quickly, with the GLP-1 receptor agonists, Wegovy (semaglutide) and tirzepatide. Cowen projects Wegovy sales of over $7B and over tirzepatide sales of more than $11B in 2030. Tirzepatide is currently approved as a type 2 diabetes therapy under the name Mounjaro but Lilly (LLY) is pursuing the drug for weight loss in the third phase.
Cowen is also bullish on Novo’s ( NVO ) CagriSema, a combination of semaglutide and a novel amylin analogue, cagrilintide. Pharma released positive phase 2 results in August showing reductions in blood sugar and weight gain. Phase 3 should begin in 2023. Cowen sees $5B in CagriSema sales if data continues to improve.
In the pipeline, Lilly (LLY) has the GLP-1R/GIPR/GCGR triple agonist retatrutide in phase 2 with a data update expected in January 2023. Other big pharmas with mid- to late-stage obesity candidates include Merck’s (NYSE: MRKGLP-1R/GCGR dual agonist efinopegdutide (data update in January), Pfizer’s (NYSE: PFE) oral treatment danuglipron, AltImmune’s (ALT) GLP-1R/GCGR dual agonist pemvidutide (ALT-801 (data update June 2023), and AstraZeneca’s (AZN) GLP-1/GCGR dual agonist cotadutide (update July 2025).
Medical Devices
In this area, Cowen sees Apollo Endoscopy (APEN) as its main option for obesity. The company’s endoscopic sleeve gastroplasty (ESG) system uses its OverStitch endoscopic suturing system. The company is developing the OverStitch NXT single channel endoscopic suturing system which is said to have performance-enhancing features to make it easier to use, expanding the scope of the technology.
Cowen also showed off Apollo’s ( APEN ) space-based device, the Orbera Intragastric Balloon System, calling it “the world’s leading intragastric balloon.” The company added that the device can cause 10% weight loss.
Cowen presented ReShape Lifesciences (RSLS) which manufactures Obalon, an intragastric balloon that contains air. In one study, Obalon caused an average of 4.2% weight loss over 12 weeks, making it significantly lower than other balloons.
