Novo Nordisk expands lead on Tesla on upbeat obesity drug trial

In this Jan. 20, 2010 file photo, a subject's waist is measured during an obesity prevention study in Chicago.
In this Jan. 20, 2010 file photo, a subject's waist is measured during an obesity prevention study in Chicago. Copyright M. Spencer Green/Copyright 2017 The AP. All rights reserved.
By Indrabati Lahiri
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Novo Nordisk, of anti-obesity drug Wegovy fame, reveals encouraging initial trial data for new weight loss drug that could potentially overtake Wegovy.

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Pharmaceutical giant Novo Nordisk has recently overtaken electric vehicle maker Tesla, in terms of market valuation, following upbeat initial trial data for a new obesity drug.

Novo Nordisk, already well known for the popular obesity drug Wegovy, had a market valuation of about $566 billion (€517.6 billion), on Thursday, as shares rose about 8%. That is more than companies such as Tesla and Visa, according to London Stock Exchange Group (LSEG) data. It also surpassed LVMH as Europe's biggest company in terms of market valuation last year.

Following the launch of Wegovy in June 2021, Novo Nordisk has established itself as a leader in the weight-loss drug sector, making the news of a potential new drug even more highly anticipated.

A GLP-1 agonist drug, Wegovy was initially designed to treat type 2 diabetes. However, over time it has been developed more as a generic weight loss drug, because of its dampening effects on food cravings. Amycretin also works in a similar way, by focusing on the hunger influencing amylin hormone in the pancreas.

Novo Nordisk's new obesity drug could be better than Wegovy

The company has recently seen encouraging results in an initial trial of the pill version of amycretin, an experimental weight loss drug. In 12 weeks, the drug enabled clinical trial participants to shed about 13.1% of their total weight.

In contrast, Wegovy, the current favourite, only yields about 6% weight loss in the same time, rising to 15% in 68 weeks.

The new drug also indicates Novo Nordisk has more in store for the coming months and is unlikely to rely solely on Wegovy's continuing success. Investors also speculate that the company may have other experimental drugs in the pipeline for the rest of the year.

Seamus Fernandez, an analyst at global investment and financial services firm Guggenheim Partners, as reported by Reuters, said: "Novo has made clear that the amycretin molecule will likely form the foundation of the company's rapidly growing pipeline."

However, the production of the pill version of amycretin could be much more expensive than the injectable weight loss drugs that are currently dominating the market. This is because of the increased amounts of active ingredients needed in the pill versions.

The company may also receive approval to sell Wegovy in China later on this year, following its Japanese debut back in February. However, there will still be restrictions on the volume.

The anti-obesity drug market could reach $100 billion (€91.46 billion) by 2030

Currently, the anti-obesity medicine market is worth about $6 billion, according to Goldman Sachs. However, it could reach about $100 billion by the end of the decade. This projection is based on a number of factors, such as the total number of patients, as well as the number of drug options available. The investment bank also forecasts about 15 million US adults needing anti-obesity drugs by 2030.

Chris Shibutani, senior biopharmaceuticals analyst at Goldman Sachs Research, as reported by Goldman Sachs said: "The obesity market is still in its early stages. The chronic weight management market is undergoing an inflection, in our view, with potential for solid growth ahead and a peak opportunity that, by our estimates, could ultimately yield some of the highest grossing drugs of all time."

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