The Weight Loss Drug Race: The Journey to a Trillion-Dollar Company π
Aug 09, 2024
30 Years of Discovery and Innovation
Three decades ago, Richard DiMarchi discovered the benefits of GLP-1 for weight loss. At the time, Eli Lilly and Company passed on the opportunity, not considering obesity a disease. Fast forward to 2004, the CMS approved coverage for bariatric surgery, and by 2013, the American Medical Association declared obesity a disease. This marked a significant shift in how obesity was perceived and treated. β³
The Rise of GLP-1 Drugs
In 2017, the patent for GLP-1 expired, leading Novo Nordisk to launch Ozempic. This drug, along with Wegovy, has generated an astounding $33 billion. These drugs have paved the way for more advancements in weight loss treatments. π
Eli Lilly’s Comeback with Zepbound
Eli Lilly is making up for lost time with the release of Zepbound, predicted to be a best-seller due to its superior weight loss results compared to Wegovy (20.9% vs. 14.9%). This has given Zepbound a projected valuation exceeding $600 billion. π΅
The Power of Dual Agonists
Zepbound, also known as tirzepatide, is a dual agonist that mimics two different hormones. This injection combines GLP-1 with glucose-dependent insulinotropic polypeptide (GIP), helping to lower blood sugar and potentially increase metabolism. This innovative approach signifies a new frontier in weight loss treatments. π
Impressive Growth and Cost Efficiency
A month after its launch, Zepbound prescriptions surged by 192%, compared to the longer growth periods seen with Novo’s drugs. Priced at $1,060 per month, Zepbound is also 20% cheaper and has seen significant demand driven by social media rather than traditional advertising. π
Future Developments: The Triple G
Pharmaceutical development is evolving, with Eli Lilly leading the way. Their upcoming drug, Retatrutide, combines GLP-1, GIP, and glucagon, a hormone that increases the long-term calorie burn rate. Preliminary studies show patients losing up to a third of their weight in 48 weeks. Additionally, Eli Lilly’s acquisition of Versanis, a startup focused on preserving muscle mass, highlights their commitment to comprehensive weight loss solutions. πͺ
A Historic Rivalry and Future Prospects
The rivalry between Eli Lilly and Novo Nordisk dates back a century with diabetes drugs. Now, it’s a race to develop weight loss drugs. Goldman Sachs predicts Zepbound will be the future market leader, with Eli Lilly potentially becoming the first trillion-dollar pharmaceutical company. πβοΈ
What’s Next?
Pharmaceutical companies will continue to push research and science to drive insurance coverage. Eli Lilly’s CEO, Dave Ricks, anticipates achieving this by 2030. As the stock prices of these leaders soar, with Eli Lilly’s PE ratio just under 50, the future looks promising. Despite potential stumbles, Eli Lilly seems poised to take the lead in the weight loss drug market. π
Welcome to the era of "Engineered Well-Being." π
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