Fat-burning fever over AI! The unstoppable rise of the "dynamic duo" of weight loss drugs

Weight loss drugs are not only surpassing big-name bags.

As the market value of two major weight loss drug manufacturers, Novo Nordisk and Eli Lilly, continues to soar, the financial blog ZeroHedge directly declares that "weight loss drugs are the new AI."

According to JPMorgan's latest forecast, by 2030, under the duopoly of Novo Nordisk and Eli Lilly, the annual sales of GLP-1 drugs will exceed $100 billion.

JPMorgan analyst Chris Schott pointed out in a research report last week that the usage rate of GLP-1 drugs is rapidly increasing due to social media hype.

Eli Lilly announced better-than-expected second-quarter and first-half results for 2023 last month. The data shows that Eli Lilly's total revenue for the first half of the year was $15.272 billion, a year-on-year increase of 7%. The revenue for the second quarter was $8.312 billion, a year-on-year increase of 28%. The GLP-1 dual-target drug Tirzepatide performed strongly, with sales of $1.548 billion in the first half of 2023 after receiving FDA approval in May 2022. Eli Lilly expects sales of this drug to exceed $4 billion in 2023. Eli Lilly also updated its 2023 performance guidance in this quarterly report. It has increased its performance guidance by $2.2 billion and expects full-year revenue to reach $33.4-33.9 billion.

In addition, Novo Nordisk also announced the preliminary data of its Phase 3 SELECT trial in August, proving that its GLP-1 drug semaglutide can bring cardiovascular benefits to obese patients.

At the beginning of September, Novo Nordisk's market value surpassed LVMH Group, becoming the largest company in Europe by market value. After a series of large increases in Eli Lilly's stock price, its market value has exceeded $550 billion, more than twice that of Pfizer.

However, due to the frenzy of weight loss enthusiasts, both companies' GLP-1 drugs are facing supply pressures, and even real diabetes patients in hospitals are facing the dilemma of no available drugs.

JPMorgan predicts that as the supply and distribution channels improve, the price of GLP-1 will gradually decrease. Currently, purchasing a monthly dose of semaglutide costs $15,000. By the end of this decade, the price of GLP-1 will drop to $325 to $350 per course of treatment, requiring only $4,000 per year.

Eli Lilly may receive approval from the US FDA (Food and Drug Administration) to start selling Mounjaro for weight loss this year. JPMorgan rates the company's stock as "hold" with a target price of $600 per share.

Domestic pharmaceutical companies are competing to lay out.

GLP-1 drugs exert an "intestinal insulin-promoting effect" in the body. Compared to traditional oral hypoglycemic drugs, they do not cause hypoglycemic side effects and can suppress appetite to achieve weight loss.

According to Frost Sullivan data, by 2030, China will have 329 million obese people. At the same time, the application of domestic GLP-1 in diabetes and obesity is still in the early stages of development, with great potential for improvement.

Currently, domestic and foreign pharmaceutical companies are actively targeting the GLP-1 pathway. Huadong Medicine's Liraglutide has been approved for domestic use in the treatment of diabetes and weight loss indications. Simaglutide has entered Phase 3 trials in China, with Qilu, Huadong, Union, and Lizhu Pharmaceuticals leading the way in multi-target layout. Domestic progress is also evident in companies such as Xinda Biotechnology's IBI362 (GLP-1R/GCGR dual-target), which is currently in Phase 3 clinical trials, and Hengrui Medicine's HRS953 (GLP-1R/GIPR), which is in Phase 2 clinical trials.

Leading overseas companies have achieved remarkable results, and Chinese pharmaceutical companies, which have a huge market space, will undoubtedly make their mark in this field.

According to Debon Securities statistics, there are already more than a dozen domestically approved GLP-1 drugs, many of which are targeting obesity indications. The future looks promising for domestic GLP-1 weight loss drugs.