Lilly, Novo dominance in weight reduction market intact regardless of Amgen entry – BofA

Hailshadow/iStock through Getty Photographs Financial institution of America argues that Eli Lilly (NYSE:LLY) and Novo Nordisk (NVO) (OTCPK:NONOF) are “undisputable leaders” available in the market for weight problems and diabetes therapeutics regardless of encouraging Section 1 information posted by Amgen (NASDAQ:AMGN) not too long ago for its investigational weight reduction remedy AMG 133. Novo (NVO) and Lilly (LLY) are in a race to dominate the U.S. weight reduction market, the place about 74% of adults are categorised as both overweight or chubby, two medical circumstances carefully linked to Sort 2 diabetes. Regardless of latest provide points, Novo (NVO) has led the U.S. marketplace for weight problems remedies for the reason that FDA accredited its Wegovy (semaglutide) injection in June 2021 for continual weight administration in adults. After successful the U.S. approval for its diabetes remedy Mounjaro, Lilly (LLY) has fast-tracked the event of the twin GIP and GLP-1 agonist, often known as tirzepatide for weight reduction with the final of two Section 3 trials anticipated to conclude by April 2023. Nevertheless, Wall Road doesn’t rule out rising entrants. Early October, Amgen (AMGN) shares surged after Morgan Stanley issued optimistic views on its experimental weight reduction remedy AMG 133, citing a multi-billion-dollar potential. Nevertheless, BofA is extra cautious. “Whereas AMG133 information seemed encouraging primarily based on our dialog with KOLs, Lilly and Novo are nonetheless years forward when it comes to growth/ commercialization in weight problems and Sort 2 diabetes,” the analysts led by Geoff Meacham wrote after Amgen’s (AMGN) Section 1 replace early this month. They famous that the info from the 133-subject placebo-controlled trial, introduced at a medical occasion on Dec. 03, indicated as much as 8% weight reduction after a single AMG 133 injection and as much as 15% weight reduction after three month-to-month injections. Nevertheless, BofA notes that its KOLs stay cautious concerning the long-term prospects of AMG 133 when it comes to tolerability and security, which, in keeping with them, require extra de-risking given its novel mechanism of motion and modality. AMG 133 is a bispecific molecule designed to behave as an antagonist for glucose-dependent insulinotropic polypeptide receptor (GIPR) and an agonist for glucagon?like peptide-1 (GLP-1). Novo’s (NVO) semaglutide is an analogue of the human GLP-1 hormone, and Lilly’s (LLY) upcoming rival tirzepatide prompts each GIP and GLP-1 receptors. “We proceed to suppose AMG133 requires considerably extra de-risking, not solely in overweight sufferers, but additionally Sort 2 diabetes sufferers given the novel MoA and modality,” Meacham and the staff wrote. Arguing that about 20% of overweight individuals even have Sort 2 diabetes, the analysts additionally be aware the affected person overlap as a purpose for his or her considerations. The themes in Amgen’s (AMGN) trial for AMG 133 have been overweight in keeping with their BMI measurements however didn’t have diabetes or different medical circumstances. Citing the usage of fewer doses and fewer frequent dosing within the trial, the analysts nonetheless count on a aggressive profile for AMG 133 in comparison with semaglutide and tirzepatide, which have demonstrated ~14% and 14% – 20% in weight reduction potential, respectively. Commenting on attributes favoring the dominance of Novo (NVO) and Lilly (LLY) within the weight reduction market, BofA cites the primary mover benefit and the proof supporting the long-term security/tolerability of their respective remedies. Regardless of Amgen’s (AMGN) early-stage information, the analysts reiterate the Purchase ranking and $390 per share goal on Lilly (LLY), arguing that the latter has pulled off one of the crucial profitable industrial rollouts within the historical past of GLP-1 class in diabetes. Moreover, BofA initiatives that tirzepatide “is nicely on the trail to change into the following multi $10B+ mega-blockbuster,” with proof suggesting greater than 20% weight reduction impact in step with bariatric surgical procedure, akin to gastric bypass. Learn: Morgan Stanley projected in July that the marketplace for weight reduction remedies is anticipated to achieve $54B in 2030.