The future of the weight loss market might not revolve around GLP-1 drugs.
By now, nearly everyone has heard of the weight loss drugs targeted at the glucagon-like protein 1 (GLP-1) receptor, like Zepbound and Wegovy by Eli Lilly and Novo Nordisk, respectively. It’s no surprise why they’re household names; those medicines are bringing in billions of revenue every quarter, driving share prices up relentlessly along the way.
However, GLP-1-based therapies aren’t going to be the only option in the weight loss medicines market forever. Some companies are pursuing other approaches that could be even more effective or complementary to the existing interventions.
So, if you’re looking for exposure to the growth of the weight loss market but are loath to invest in the mechanism of action favored by the biggest players, taking a look at a couple of the most promising alternatives might deliver some ideas for an investment. Let’s dive in.
This biotech’s candidate could be better than the reigning GLP-1 champions
Zealand Pharma (ZLDP.F -2.75%) has three clinical-stage programs in its pipeline, one of which, petrelintide, aims to activate both the amylin and the calcitonin receptors, making it highly differentiated from GLP-1 drugs. That program will soon enter phase 2b clinical trials, and the early results look promising.
Management thinks that this candidate could help patients lose as much as 20% of their body mass in a similar period to other weight loss drugs. Petrelintide may also help patients retain their muscle mass more effectively than they would with GLP-1-targeted medicines. It could be more tolerable for patients to be treated with, too. Whereas GLP-1 medicines actively reduce patients’ appetites and perhaps their enjoyment of food as well, petrelintide is thought to increase their feelings of satiety after eating while also causing less disruption to the GI tract.
Those attributes, if they’re proven, would make the candidate a strong competitor, as it would offer more than one advantage over the current drugs that are the standard of care. And, as Zealand Pharma exclusively chooses to license out its programs to other companies for commercialization, it wouldn’t need to spend much on manufacturing, which is something that the GLP-1 drug developers typically shell out billions to do.
It also has nearly $1.3 billion in cash, cash equivalents, and short-term investments, so it has more than enough resources to continue with the research and development (R&D) of petrelintide as well as its other programs, most of which are targeted at GLP-1 in conjunction with other receptors.
Adjunct therapies for use alongside GLP-1 drugs could be profitable too
BioAge Labs (BIOA 5.65%) has two mid-stage clinical programs for treating obesity, both of which are testing its lead candidate, a molecule called azelaprag. Azelaprag targets the APJ receptor, but the twist to remember is that the candidate is being investigated in combination with the leading GLP-1 drugs made by Novo Nordisk and Eli Lilly.
The idea of this approach is that it may be possible to boost the efficacy of those medicines while compensating for their drawbacks, specifically lean muscle mass loss. It may also be helpful in reducing the nausea and other GI symptoms that treatment with a GLP-1 drug typically entails, making the experience significantly less unpleasant.
If BioAge can prove that azelaprag is as useful as it claims, the candidate would probably not have any problem gaining market share, and it could even bring in billions if the proposed combination therapies become the first-line solution for obesity. However, the long-term vision for the biotech is even more ambitious, and the results for shareholders would be even sunnier.
Management speculates that it may eventually be possible to develop a “pharmacological parallel to diet and exercise” using its candidate alongside the GLP-1 drugs of today or the very near future. That would probably expand the addressable market of its candidate by an astronomical amount, and it isn’t as though the market for weight loss medicines is small today by any means.
At the moment, BioAge is hot off its initial public offering (IPO), which closed on Oct. 1. Alongside a private placement of its shares, it raised around $238 million in gross proceeds. Therefore, it’ll probably have enough money to run the two clinical trials for its lead program without raising more cash, which is bullish for those who invest in its shares today.
