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The Zacks Analyst Blog Highlights Stocks recently featured in the blog include: Novo Nordisk, Eli Lilly's, Viking, Altimmune, Roche and Amgen
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For Immediate Releases
Chicago, IL – May 20, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Novo Nordisk (NVO - Free Report) , Eli Lilly’s (LLY - Free Report) , Viking Therapeutics (VKTX - Free Report) , Altimmune (ALT - Free Report) , Roche (RHHBY - Free Report) and Amgen (AMGN - Free Report) .
4 Stocks That Could Break Novo/Lilly's Obesity Drug Duopoly
The obesity market has garnered much interest lately, ever since Novo Nordisk received FDA approval for its obesity drug Wegovy in 2021. It was only after a couple of years that the market gained a second entrant – Eli Lilly’s Zepbound, which received FDA approval last year in November.
Lilly and Novo have been registering top- and bottom-line growth, owing to the vastness of the total market size for obesity. The companies even achieved a market cap north of $500 billion. However, these firms have been unable to cope with existing demand and are facing delays in fulfilling orders amid continued supply constraints and product shortages.
Wall Street anticipates an even bigger market for obesity drugs. Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by the end of this decade. This is also evident from the fact that Lilly and Novo are not only investing heavily to optimize their production capacities but have also started evaluating multiple other novel obesity candidates in their pipeline.
Anticipating this rising demand, several biotech/pharma companies are developing their obesity drugs with the hope of gaining a small but lucrative share in this growing market. Here, we discuss four biotech/pharma stocks that we believe could break the duopoly in the obesity space in the long run.
Viking Therapeutics
Viking Therapeutics, a clinical-stage biotech, is evaluating both oral and subcutaneous formulations of its obesity drug, VK2735, in early-stage and mid-stage studies, respectively. This investigational drug has blockbuster potential, having demonstrated superior weight reduction capabilities in both clinical studies.
In February, Viking Therapeutics reported that the mid-stage study, which evaluated a subcutaneous formulation of VK2375, achieved its primary and all secondary endpoints with statistical significance. Patients treated with this formulation achieved a mean weight reduction of 14.7% after 13 weeks compared with 1.7% in the placebo group.
In March, Viking reported data from the early-stage study on the oral formulation of the drug, which demonstrated promising dose-dependent reductions in mean body weight after 28 days of daily dosing.
Viking Therapeutics intends to meet with the FDA to discuss the above results to determine the next steps in the candidate’s development. It expects to advance both formulations into further development before this year’s end.
Another clinical-stage company, Altimmune , has only one candidate in its pipeline, pemvidutide, which is being evaluated in separate mid-stage studies for obesity and metabolic dysfunction-associated steatohepatitis (MASH).
Last December, ALT reported positive top-line data from the phase II MOMENTUM study evaluating pemvidutide in obesity. Data from the study demonstrated dose-dependent reductions in mean body weight after 48 weeks of treatment with the drug. While patients who received the 1.2mg dose of the drug achieved a mean weight loss of 10.3%, patients who received the 2.4mg dose achieved a mean weight loss of 15.6%.
Altimmune also reported that patients in the 2.4mg dose group observed a near-linear trajectory of continued weight loss at the end of the treatment. Based on these results, management is undergoing preparations for an end-of-phase II meeting with the FDA. This meeting is expected to be held toward the end of third-quarter 2024, where management intends to present a comprehensive data package, including data from the MOMENTUM study.
Roche forayed into the obesity market when it acquired privately owned Carmot Therapeutics for $2.7 billion in January. This acquisition added a differentiated portfolio of incretins to the company’s pipeline, which includes lead assets CT-388, CT-996 and CT-868.
Earlier this week, the Swiss pharma giant reported positive results from an early-stage study evaluating CT-388. Over 24 weeks, patients who received this once-weekly, subcutaneously-injected drug achieved a mean placebo-adjusted weight loss of 18.8%. Per management, these results were ‘clinically meaningful and statistically significant’ compared with a placebo.
Roche also provided an insight into this data. While all patients who received CT-388 achieved a weight loss of more than 5%, around 45% of patients lost more than 20% of their body weight. Treatment with the drug was also shown to be beneficial to type II diabetes (T2D) patients.
Roche is also evaluating CT-996 and CT-868 across separate early-stage studies. While CT-996 is an oral formulation to treat obesity patients with and without T2D, CT-868 is intended to treat obese patients with type I diabetes (T1D).
Per Roche, the incretin-based portfolio could also be expanded to other indications where incretins play a role, including cardiovascular, retinal and neurodegenerative diseases.
While Wegovy and Zepbound require weekly administrations, Amgen tried to stand out with a different approach. The company’s lead obesity candidate is MariTide (maridebart cafraglutide) which is being evaluated in a phase II study. Though the drug will be administered through an injection, the pharma giant is testing its drug to be taken once a month or even less frequently.
Alongside its Q1 earnings report, Amgen announced that it has completed an interim analysis of data from a mid-stage study MariTide. Though management did not discuss any numbers, it was ‘very encouraged’ with the interim data. In fact, Amgen has also initiated activities to expand manufacturing capacity for the drug.
The top line 52-week data from the above mid-study is expected in late 2024. Amgen intends to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and diabetes.
With the obesity market expected to grow at an encouraging pace, competition is likely to increase at the same pace, if not faster. After all, when a pie is being made, everybody wants a big chunk of it.
Even though Novo had an early head start of more than two years in the space, Lilly’s entry into the space and Zepbound's performance show that the market welcomes new products that have shown promising efficacy results.
Though these two companies have massive infrastructures and resources, especially when compared to the likes of Altimmune and Viking Therapeutics, the proper use of resources could help these clinical-stage companies expand their foothold in the obesity market.
After all, Moderna was not the behemoth it is today. Until 2020-end, the company lacked a marketed product and look where it is now — taking on pharma big-wigs like Pfizer, all thanks to its cash-cow COVID-19 vaccine.
Zacks Rank
While Viking Therapeutics, Altimmune and Amgen each carry a Zacks Rank #3 (Hold), Roche holds a Zacks Rank #4 (Sell).
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Stocks recently featured in the blog include: Novo Nordisk, Eli Lilly's, Viking, Altimmune, Roche and Amgen
For Immediate Releases
Chicago, IL – May 20, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Novo Nordisk (NVO - Free Report) , Eli Lilly’s (LLY - Free Report) , Viking Therapeutics (VKTX - Free Report) , Altimmune (ALT - Free Report) , Roche (RHHBY - Free Report) and Amgen (AMGN - Free Report) .
4 Stocks That Could Break Novo/Lilly's Obesity Drug Duopoly
The obesity market has garnered much interest lately, ever since Novo Nordisk received FDA approval for its obesity drug Wegovy in 2021. It was only after a couple of years that the market gained a second entrant – Eli Lilly’s Zepbound, which received FDA approval last year in November.
Lilly and Novo have been registering top- and bottom-line growth, owing to the vastness of the total market size for obesity. The companies even achieved a market cap north of $500 billion. However, these firms have been unable to cope with existing demand and are facing delays in fulfilling orders amid continued supply constraints and product shortages.
Wall Street anticipates an even bigger market for obesity drugs. Per research conducted by Goldman Sachs, the obesity market in the United States is expected to reach $100 billion by the end of this decade. This is also evident from the fact that Lilly and Novo are not only investing heavily to optimize their production capacities but have also started evaluating multiple other novel obesity candidates in their pipeline.
Anticipating this rising demand, several biotech/pharma companies are developing their obesity drugs with the hope of gaining a small but lucrative share in this growing market. Here, we discuss four biotech/pharma stocks that we believe could break the duopoly in the obesity space in the long run.
Viking Therapeutics
Viking Therapeutics, a clinical-stage biotech, is evaluating both oral and subcutaneous formulations of its obesity drug, VK2735, in early-stage and mid-stage studies, respectively. This investigational drug has blockbuster potential, having demonstrated superior weight reduction capabilities in both clinical studies.
In February, Viking Therapeutics reported that the mid-stage study, which evaluated a subcutaneous formulation of VK2375, achieved its primary and all secondary endpoints with statistical significance. Patients treated with this formulation achieved a mean weight reduction of 14.7% after 13 weeks compared with 1.7% in the placebo group.
In March, Viking reported data from the early-stage study on the oral formulation of the drug, which demonstrated promising dose-dependent reductions in mean body weight after 28 days of daily dosing.
Viking Therapeutics intends to meet with the FDA to discuss the above results to determine the next steps in the candidate’s development. It expects to advance both formulations into further development before this year’s end.
Viking Therapeutics, Inc. price | Viking Therapeutics, Inc. Quote
Altimmune
Another clinical-stage company, Altimmune , has only one candidate in its pipeline, pemvidutide, which is being evaluated in separate mid-stage studies for obesity and metabolic dysfunction-associated steatohepatitis (MASH).
Last December, ALT reported positive top-line data from the phase II MOMENTUM study evaluating pemvidutide in obesity. Data from the study demonstrated dose-dependent reductions in mean body weight after 48 weeks of treatment with the drug. While patients who received the 1.2mg dose of the drug achieved a mean weight loss of 10.3%, patients who received the 2.4mg dose achieved a mean weight loss of 15.6%.
Altimmune also reported that patients in the 2.4mg dose group observed a near-linear trajectory of continued weight loss at the end of the treatment. Based on these results, management is undergoing preparations for an end-of-phase II meeting with the FDA. This meeting is expected to be held toward the end of third-quarter 2024, where management intends to present a comprehensive data package, including data from the MOMENTUM study.
Altimmune, Inc. price | Altimmune, Inc. Quote
Roche
Roche forayed into the obesity market when it acquired privately owned Carmot Therapeutics for $2.7 billion in January. This acquisition added a differentiated portfolio of incretins to the company’s pipeline, which includes lead assets CT-388, CT-996 and CT-868.
Earlier this week, the Swiss pharma giant reported positive results from an early-stage study evaluating CT-388. Over 24 weeks, patients who received this once-weekly, subcutaneously-injected drug achieved a mean placebo-adjusted weight loss of 18.8%. Per management, these results were ‘clinically meaningful and statistically significant’ compared with a placebo.
Roche also provided an insight into this data. While all patients who received CT-388 achieved a weight loss of more than 5%, around 45% of patients lost more than 20% of their body weight. Treatment with the drug was also shown to be beneficial to type II diabetes (T2D) patients.
Roche is also evaluating CT-996 and CT-868 across separate early-stage studies. While CT-996 is an oral formulation to treat obesity patients with and without T2D, CT-868 is intended to treat obese patients with type I diabetes (T1D).
Per Roche, the incretin-based portfolio could also be expanded to other indications where incretins play a role, including cardiovascular, retinal and neurodegenerative diseases.
Roche Holding AG price | Roche Holding AG Quote
Amgen
While Wegovy and Zepbound require weekly administrations, Amgen tried to stand out with a different approach. The company’s lead obesity candidate is MariTide (maridebart cafraglutide) which is being evaluated in a phase II study. Though the drug will be administered through an injection, the pharma giant is testing its drug to be taken once a month or even less frequently.
Alongside its Q1 earnings report, Amgen announced that it has completed an interim analysis of data from a mid-stage study MariTide. Though management did not discuss any numbers, it was ‘very encouraged’ with the interim data. In fact, Amgen has also initiated activities to expand manufacturing capacity for the drug.
The top line 52-week data from the above mid-study is expected in late 2024. Amgen intends to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and diabetes.
Amgen Inc. price | Amgen Inc. Quote
Our Take
With the obesity market expected to grow at an encouraging pace, competition is likely to increase at the same pace, if not faster. After all, when a pie is being made, everybody wants a big chunk of it.
Even though Novo had an early head start of more than two years in the space, Lilly’s entry into the space and Zepbound's performance show that the market welcomes new products that have shown promising efficacy results.
Though these two companies have massive infrastructures and resources, especially when compared to the likes of Altimmune and Viking Therapeutics, the proper use of resources could help these clinical-stage companies expand their foothold in the obesity market.
After all, Moderna was not the behemoth it is today. Until 2020-end, the company lacked a marketed product and look where it is now — taking on pharma big-wigs like Pfizer, all thanks to its cash-cow COVID-19 vaccine.
Zacks Rank
While Viking Therapeutics, Altimmune and Amgen each carry a Zacks Rank #3 (Hold), Roche holds a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.