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Pfizer enters weight loss drug market with Novo Nordisk, Eli Lilly

Pfizer enters weight loss drug market with Novo Nordisk, Eli Lilly

CFOTO | Future Publishing | Getty Images

As its Covid gains evaporate, Pfizer wants a chunk of the budding weight loss drug market. 

Analysts say upcoming data on Pfizer’s experimental obesity pill, danuglipron, will be crucial in determining how competitive the company can be against the space’s dominant players Eli Lilly and Novo Nordisk.

Those companies helped spark the weight loss drug industry gold rush over the last year with their weekly obesity and diabetes injections, such as Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s Mounjaro. They are now racing to develop their own pills for obesity and diabetes. 

Investors are waiting for Pfizer to release phase two trial data on its twice-daily pill, in obese patients without diabetes, by the end of the year. They want to see the drug cause a similar level of weight loss as a once-daily pill from Eli Lilly. Investors are also eager for Pfizer to release trial data early next year on a once-daily version of danuglipron, which is seen as the more competitive form of the drug.

Pfizer sees a major opportunity in the segment, as it looks to rebound from plummeting demand for its Covid products and reverse a roughly 40% share price drop this year.

CEO Albert Bourla said in January that the market for GLP-1s – a class of obesity and diabetes drugs that mimic a gut hormone to suppress a person’s appetite – could eventually grow to $90 billion, and the company wants to capture $10 billion of that segment with an oral treatment. 

Investors have become more pessimistic about Pfizer’s potential in the weight loss drug industry since the company scrapped its experimental once-daily pill in June, citing elevated liver enzymes in people who took it. That left Pfizer with the twice-daily danuglipron, which Wall Street is less excited about because it would be less convenient than a once-a-day treatment. 

Encouraging results from the trials may trigger the same enthusiasm for Pfizer that has boosted the share prices of Novo Nordisk and Eli Lilly this year.

“If Pfizer’s data is positive, then I think people might be able to look beyond all this Covid overhang,” Cantor Fitzgerald analyst Louise Chen told CNBC. 

A weight loss pill could be a boon for all three companies. Oral drugs are typically easier to manufacture than injections, and more convenient for doctors to prescribe and patients to take. Pills could also potentially help alleviate the supply constraints plaguing many of their injectable counterparts as demand for the drugs soars. 

Eli Lilly’s pill sets the bar for efficacy 

Ahead of the phase two trial data, several analysts have said Pfizer’s twice-daily pill has to be about as effective as Eli Lilly’s once-a-day pill to be competitive. That means at least a 14% to 15% weight loss, Chen told CNBC.

Leerink Securities analyst David Risinger wrote in October that Pfizer’s danuglipron needs to show weight reduction in the “mid-teens” percentages to be considered competitive with Eli Lilly’s pill, which is called orforglipron. 

Obese or overweight patients who took 45 milligrams of Eli Lilly’s pill once a day lost up to 14.7% of their body weight, or 34 pounds, after 36 weeks, according to the company’s phase two trial results. 

Those results appear consistent with the weight reduction caused by a high-dose oral version of Novo Nordisk’s semaglutide – the active ingredient used in Ozempic and Wegovy – but came over a shorter trial period.

Overweight or obese patients who took 50 milligrams of Novo Nordisk’s drug once a day saw an average weight loss of 15.1% after 68 weeks, according to phase three clinical trial results released in June. 

Notably, Novo Nordisk already markets a low-dose oral version of semaglutide under the name Rybelsus for the treatment of Type 2 diabetes.

Pfizer’s upcoming phase two trial data will provide a glimpse of twice-daily danuglipron’s effects over a longer time period than the company’s previous studies of the drug. The study examined the weight loss effect of the treatment in more than 600 adults with obesity after 26 or 32 weeks at different dosage amounts.

In an earlier midstage trial, patients with Type 2 diabetes who took a 120-milligram version of danuglipron twice a day lost around 10 pounds on average after 16 weeks.

Another midstage trial found that diabetic patients who took a 200-milligram version of danuglipron twice a day lost nearly 12 pounds, or 5.8% of their weight, on average after 12 weeks. 

Investors still want to see a once-daily version 

Even if Pfizer’s upcoming data is encouraging, many investors will still be eager to see the efficacy and safety profile of a once-daily version next year. 

Physicians generally prefer once-daily pills over twice-daily drugs, Wells Fargo analyst Mohit Bansal said in a research note in June. 

Health experts also previously told CNBC that patients often forget to take a medication if they need to do it twice, the experts said. 

A once-daily danuglipron dose also could quell concerns about the potentially higher level of gastrointestinal side effects – such as nausea and vomiting –  associated with the twice-daily version. 

More CNBC health coverage

Leerink Partners’ Risinger wrote in an October note that the proportion of patients who discontinue treatment with Pfizer’s twice-daily danuglipron in the phase two trial will likely be higher than those who stopped taking Eli Lilly’s orforglipron. He said that’s partly because danuglipron’s total daily dose is far higher, which may cause more adverse effects.

Analysts said Pfizer appears to believe a once-daily version of the drug could lessen gastrointestinal side effects.

They pointed to Pfizer’s second-quarter earnings call, when the company’s chief scientific officer, Mikael Dolsten, suggested that a once-daily version may improve a patient’s tolerability of the drug, which could lessen the gastrointestinal side effects “that have been seen as limiting” danuglipron.

The bigger question is whether a once-daily version of the pill will be ready for a phase three trial in 2024, which is seen as the next big step toward potential Food and Drug Administration approval.

Pfizer thinks it’s possible. During the company’s third-quarter earnings call, Dolsten said a pivotal late-stage trial for the once-a-day version is “within our reach” next year.

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