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Biotech firm Viking Therapeutics has emerged as a strong potential entrant — or takeover goal — within the budding weight loss drug market.
Viking is only one of several companies racing to affix the rising area. Some analysts say the market may very well be value $100 billion by the top of the last decade.
Viking goals to compete with injectable medicine from Eli Lilly and Novo Nordisk. Their therapies sparked the load loss drug trade gold rush over the previous 12 months regardless of their hefty value tags and limitations to insurance coverage protection.
Some Wall Avenue analysts mentioned Viking’s experimental weight problems remedy could also be “best-in-class.” In a midstage trial, an injectable model of Viking’s drug appeared to advertise even better weight reduction than Eli Lilly’s Zepbound.
Viking gave a primary glimpse at information from that research on Tuesday, and its shares soared 120%. The promising outcomes make the corporate a formidable potential participant in a market that can possible have room for extra entrants within the coming years.
Goldman Sachs projects that between 10 million and 70 million Individuals will probably be taking weight reduction medicine by 2028. Eli Lilly and Novo Nordisk have additionally struggled to supply sufficient provide of their therapies, giving different firms an opportunity to win market share.
The brand new information additionally makes Viking a extra enticing deal goal for bigger firms attempting to interrupt into the area or develop their weight problems remedy choices.
It is too early to say whether or not Viking’s drug may have an edge over current or growing weight reduction therapies. It is troublesome to match therapies with out pitting them face to face in the identical medical trial.
Viking additionally must conduct a late-stage research on its drug, and sure will not launch the injection till the later a part of the last decade. The small firm faces hurdles to getting into the market, similar to manufacturing sufficient of the drug to fulfill booming demand. However an acquisition by a bigger firm may assist remedy a few of these points.
Information suggests Viking’s drug might have an edge
Viking’s section two trial adopted greater than 170 sufferers who’re chubby or overweight. They obtained totally different dose sizes of the injectable drug or a placebo.
The trial didn’t straight examine Viking’s remedy to different medicine. Nonetheless, many analysts in contrast Viking’s injection to Eli Lilly’s Zepbound, largely as a result of they work the identical method.
An injection pen of Zepbound, Eli Lilly’s weight reduction drug, is displayed in New York Metropolis on Dec. 11, 2023.
Brendan Mcdermid | Reuters
Each medicine imitate two naturally produced intestine hormones known as GLP-1 and GIP. GLP helps cut back meals consumption and urge for food. GIP, which additionally suppresses urge for food, may enhance how the physique breaks down sugar and fats.
In the meantime, Novo Nordisk’s weight reduction injection Wegovy solely targets GLP-1.
Analysts had been notably impressed by the load sufferers misplaced after they took the best dose of Viking’s drug. Those that obtained a weekly 15 milligram dose of the remedy misplaced 13.1% of their physique weight on common after 13 weeks in comparison with those that took the placebo.
Notably, there was no proof of a plateau in weight discount at week 13 for any dose of the drug. That implies that “additional weight reduction is likely to be achieved” by holding sufferers on the remedy longer, Viking CEO Brian Lian mentioned throughout a name with buyers on Tuesday.
Viking’s drug information exhibits a “best-in-class profile” amongst each authorized and experimental weight reduction medicine with section two trials, William Blair analyst Andy Hsieh wrote in a observe Tuesday. Eli Lilly’s Zepbound generated roughly 7% weight reduction relative to a placebo after 12 weeks in a section three medical trial, Hsieh famous.
Viking’s drug additionally seems to high Novo Nordisk’s weight reduction injection Wegovy, based on a separate Tuesday observe from BTIG analysts.
Primarily based on chart information from a phase three trial, the analysts estimated that Wegovy induced round 5% weight reduction at 13 weeks in comparison with a placebo.
In the meantime, a number of analysts estimated that some doses of Eli Lilly’s experimental injection, retatrutide, induced between 9% and 13% weight reduction relative to a placebo at 13 weeks based mostly on chart information from a midstage trial.
The vast majority of antagonistic unintended effects that sufferers skilled after beginning Viking’s drug had been gentle or reasonable. A lot of these situations had been gastrointestinal, which is frequent throughout all weight reduction and diabetes therapies.
Round 20% of sufferers who took the 15 milligram model of Viking’s drug discontinued remedy early within the research. That compares with round 14% of these taking the placebo who stopped early within the trial.
However Jefferies analyst Akash Tewari wrote in a observe Tuesday that Viking’s trial used quicker “titration” in sufferers. That refers to rising the dose dimension a affected person takes over time till they attain a goal dosage degree.
He mentioned Viking might be able to make its drug simpler for sufferers to tolerate in a future trial with slower titration, which may probably decrease the remedy’s efficacy.
Viking nonetheless has a protracted solution to go
Regardless of the compelling information, Viking has way more work to do earlier than it might probably compete within the weight reduction drug market.
The corporate plans to fulfill with the U.S. Meals and Drug Administration later this 12 months to debate a medical improvement plan for the remedy.
Viking CEO Brian Lian instructed buyers on a name Tuesday that the corporate will possible conduct one other section two trial that would final six to 9 months.
Jefferies’ Tewari estimates that Viking’s remedy will not attain the market till 2029 or later. A late-stage trial on the drug may very well be prolonged. Eli Lilly’s section three research on Zepbound lasted two and a half to 3 years.
The late entrance of Viking’s drug is one purpose why Tewari would not imagine the corporate will meaningfully minimize into Eli Lilly’s market.
The pharmaceutical big may additionally launch a slate of different weight reduction therapies over the following few years which will have benefits over Zepbound, whether or not they provide extra weight reduction or comfort. They embrace Eli Lilly’s experimental tablet orforglipron and the broadly watched retatrutide, which mimics three intestine hormones as a substitute of two.
An Eli Lilly and Firm pharmaceutical manufacturing plant is pictured in Branchburg, New Jersey, on March 5, 2021.
Mike Segar | Reuters
Analysts from Deutsche Financial institution added in a observe Tuesday that manufacturing the therapies “at scale to fulfill outsized demand has confirmed to be no straightforward feat.” They mentioned that provides Eli Lilly and Novo Nordisk a “defensive moat” in opposition to rivals.
Viking acknowledged this hurdle on the decision Tuesday. Lian mentioned the corporate has sufficient provide of the drug to assist its medical trials, however its manufacturing capability is inadequate for a industrial rollout.
However Lian famous that the corporate is “spending a number of time” evaluating a number of manufacturing processes to know “what’s quickest, what’s highest yielding, what’s least expensive and what’s most scalable.”
Partnerships, buyouts are on the desk
Viking’s spectacular information may make it a gorgeous goal for a takeover or partnership with a big pharmaceutical firm. That would give Viking the industrial and manufacturing capabilities wanted to compete within the weight reduction drug market.
William Blair’s Hsieh added that enormous pharmaceutical firms may maximize the worth of Viking’s remedy as a result of they may higher navigate the rebate and reimbursement panorama for weight reduction medicine.
Some analysts anticipate different firms to have excessive curiosity in Viking.
“This very properly may very well be on the purchasing listing for any large-cap pharma or biotech firm that wishes to be within the weight problems market however at the moment would not have a drug. There are many them on the market,” Oppenheimer analyst Jay Olson instructed CNBC.
He added that an organization may “pay a reasonably important premium for Viking and choose this up … for a comparatively low value in comparison with the potential that exists for a drug like this.” As of Friday, Viking had a market cap of greater than $8.5 billion.
Injection pens of Novo Nordisk’s weight reduction drug Wegovy are proven on this photograph in Oslo, Norway, on Nov. 21, 2023.
Victoria Klesty | Reuters
Viking is an interesting deal goal due to extra than simply the brand new information. Wall Avenue is keen for the corporate to launch early-stage trial outcomes on an oral model of its weight reduction remedy this quarter.
The BTIG analysts famous that the mental property protection for each variations of the drug extends past 2040, “boding properly” for potential partnership discussions.
Viking additionally has different medicine in improvement, together with a promising oral remedy for a sure type of liver illness. Eli Lilly, Novo Nordisk and different drugmakers are additionally racing to see whether or not their medicine can deal with that very same situation.
Viking hasn’t disclosed any particulars about its discussions with potential companions. However the firm has “all the time been open to accomplice discussions since day one, so we’re all the time opportunistically evaluating no matter is offered to us,” Lian mentioned throughout Viking’s fourth-quarter earnings name final month.
Different drugmakers have pursued offers over the previous 12 months to carve out an area within the weight reduction drug market.
Swiss firm Roche mentioned it will buy the privately held U.S. weight problems drugmaker Carmot Therapeutics for $2.7 billion. AstraZeneca signed a licensing agreement with Chinese language biotech firm Eccogene to develop an weight problems tablet.
Even Novo Nordisk and Eli Lilly have snapped up smaller weight problems drug firms this 12 months to keep up their dominance out there.
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