On October 13th of this year, the stock price of American pharmaceutical giant Lilly reached a historic high of $629.97 per share. After three consecutive years of significant gains, Lilly became the king of global pharmaceutical companies, with its latest market value exceeding $500 billion. Novo Nordisk, another pharmaceutical company from Denmark, also reached a new high on October 13th, with a market value exceeding $440 billion, surpassing LVMH Group and becoming the highest company in Europe by market value.
The stock prices of the two major pharmaceutical giants have skyrocketed, both related to the current weight loss drug craze and the hottest target, GLP-1. Faced with the new trend of weight loss drugs, Chinese pharmaceutical companies have also shown great enthusiasm for participation. According to the Insight database, multiple pharmaceutical companies in China, including Hanyu Pharmaceutical, Haizheng Pharmaceutical, Aimike, and Hengrui Pharmaceutical, have established their presence in the field of weight loss drugs.
The market for weight loss pills is booming
I recently lost 15 pounds by injecting Smeglutide in less than 2 months, and the effect is still quite obvious. Many friends around me who have weight requirements or want to lose weight are using this product, "a respondent told the Securities Times.
This is a prescription drug, and due to its indications and clear therapeutic effects, not only did Tesla CEO Elon Musk tweet that he lost 9 kilograms in a month, thanks to regular fasting and use of smectide. In the first half of 2023, major listed companies disclosed their financial reports, and the combined sales of smectide oral and injection formulations reached $9.2 billion, quickly occupying the world's second largest prescription drug list This has attracted high attention from the capital market Hanyu Pharmaceutical related personnel said.
The support of celebrity influence has led to a surge in sales of Smegglutide, and countless videos and social accounts promoting their weight loss effects have quickly made this "weight loss miracle drug" popular.
The reporter found that the price of this weight loss product on the e-commerce platform was 1.34mg * 3ml/box, about 885 yuan, and 1.34mg * 1.5ml/box, about 527 yuan. The ranking list showed that this weight loss product was the fifth most popular product in diabetes. The purchase of this product requires a prescription drug issued by a doctor and diagnosed as type II diabetes. The prescription can be purchased directly after two simple questions are asked online. The prescription looks more like a formality.
According to Hanyu Pharmaceutical, Novo Nordisk's star weight loss drugs Smeglutide and Liraglutide are both GLP-1R (glucagon like peptide-1 receptor) agonists. The treatment principle is to activate GLP-1R, enhance insulin secretion in a glucose concentration dependent manner, inhibit glucagon secretion, and delay gastric emptying, reducing food intake through central appetite inhibition. Clinical trials of Smeglutide have shown that it can reduce body weight by up to 15%.
It is obvious that Smegglutide ignited the lead of the obesity revolution. People are beginning to understand that obesity is a real disease, not just a matter of lifestyle and willpower. Losing weight is a painful thing, but if medication can help me feel full, reduce sugar intake in food, and achieve weight balance, I believe this is the happiness of life brought by technology. "Chen Mumu, a user of Smeglutide products, told reporters.
However, this readily available prescription drug actually carries hidden risks. The drug instructions for Smeglutide approved by the US Food and Drug Administration do indeed indicate the risk of thyroid cancer. According to data from the Adverse Event Reporting System of the US Food and Drug Administration, since 2018, many adverse reports have come from patients or their healthcare providers taking smectide.
Ms. Liu, who has just started using Smeglutide products, told reporters that the weight loss effect is indeed good, and she doesn't have much appetite for things she used to like to eat. But the side effects of nausea and vomiting are also obvious, especially during the physiological period, which worsens.
Huge Industry Imagination Space
According to Frost Sullivan's statistics, GLP-1, as one of the most popular targets, has a global market of over 13 billion US dollars in 2020. It is expected that the GLP-1 drug market will reach 28.3 billion US dollars in 2025, with a compound annual growth rate of 16.6% from 2020 to 2025, and over 40 billion US dollars by 2030. Morgan Stanley research suggests that the global weight loss market for prescription drugs may exceed $77 billion by 2030.
As early developers of weight loss drugs, Novo Nordisk and Lilly Pharmaceuticals have clearly enjoyed this huge market dividend and undoubtedly become the two giants in the obesity drug market. In China, dozens of drugs using the same mechanism are currently undergoing clinical trials. Hanyu Pharmaceutical, Huadong Pharmaceutical, Haizheng Pharmaceutical, Aimike, Hengrui Pharmaceutical and other companies have laid out their positions in the field of weight loss drugs, striving to seize the market. The Chinese weight loss market has been booming for a while.
Hanyu Pharmaceuticals told reporters that the company's international product pipeline has completed the layout of weight-loss and hypoglycemic drugs, such as weight loss and hypoglycemic drugs, Alzheimer's disease, osteoporosis, and assisted reproduction drugs. The products include Liraglutide, Smeglutide, Tilposide, Glatiride, Treparatide, Abapatide, and Citrarek. The company is carrying out non-public quota increases around weight loss and sugar reduction pipeline products, investing in expanding production capacity and international listing for peptide weight loss and weight loss products. In the future, with the tiered listing of the products of the "China US Europe Three News", it will also drive the continuous improvement of the company's performance.
In this regard, Yu Zhong, Vice President of Cornerstone Capital Investment Department, believes that the investment prospects of China's GLP-1 related tracks are also very bright, among which terminal products can focus on three major research and development trends. The first trend is long-term products, which only need to be used once a week or two. At present, there are two long-term product strategies. One is the Fc fusion protein, such as Dulaglutide; Another type is "non natural amino acids+fatty chains", such as smectide. The second trend is dual target products. Taking Tilposide as an example, it activates both GLP-1 and GIP receptors, greatly improving the hypoglycemic effect, reaching the known hypoglycemic ceiling, and also reducing gastrointestinal side effects. The third trend is oral medication, which pioneered oral administration of smectide by promoting the absorption of peptides in the small intestine through the carrier SNAC. Phase III experiments have shown a weight loss of 17.4%. Pfizer and other companies are also developing oral small molecule GLP-1 receptor agonists, with the main research and development strategy being intestinal absorption promoting technology or small molecules.
At present, in response to these research and development trends, some companies in China are developing or laying out. As of August this year, China has 43 clinical trial projects for GLP-1 type weight loss drugs, accounting for 40% of the global total. Among them, 11 companies such as Fosun Pharmaceutical, Xinda Biology, and Xinlitai have entered the clinical phase III stage and are in the forefront of research and development progress.
How do Chinese pharmaceutical companies share the benefits?
At present, it is mainly foreign pharmaceutical companies that have received drug returns from the research and development of innovative drugs for GLP-1 receptor agonists. "According to relevant personnel from Yifeng Capital, there are two main paths for Chinese local pharmaceutical companies to participate in: first, drug research and development, specifically by directly conducting the research and development of innovative drugs for GLP-1 receptor agonists, or conducting the research and development of biologically similar drugs for GLP-1. From the research and development perspective, there are currently the most peptide products in the market, Secondly, there are small molecule drugs, with the least number of monoclonal and dual antibody agonists. Therefore, the layout of monoclonal antibodies, especially dual antibody type GLP-1 receptor agonists, is a differentiation advantage and breakthrough point. The second is to deepen the upstream of the industrial chain and become a supplier of peptide raw materials, which is also a way for domestic enterprises to participate. Specifically, on the one hand, the global market for non insulin peptide drugs is even larger. According to Frost Sullivan's prediction, the market size is expected to increase from $35.7 billion in 2020 to $62.2 billion in 2025; On the other hand, compared to drug research and development, peptide raw material pharmaceutical companies can monetize faster once they enter the approved GLP-1 product industry chain.
In Yu Zhong's view, the entire GLP-1 industry chain contains rich investment opportunities. Firstly, benefiting from the rapid release of GLP-1, the peptide synthesis industry chain is expected to explode. In the future, with the release of such drugs, peptide synthesis companies are expected to benefit. Secondly, disposable injection pens for drug use will also be used in large quantities. At present, the concentration of this industry is relatively high, with Lilly, Novo Nordisk, and Sanofi holding 80% of the market share, most of which are contracted by the world's largest injection pen enterprise, Swiss YPS. 90% of the domestic injection pen market is occupied by YPS, and domestic suppliers share the remaining less than 10%. At the same time, a few mainstream domestic pharmaceutical companies (Ganli Pharmaceutical and United Laboratories) have developed their own supply chains. The industry has a large space, but the main players are relatively concentrated. Thirdly, the carrier and reagent industries required for peptide solid-phase synthesis are expected to benefit. This opportunity comes from producing raw materials. Taking the production process of Smegglutide and Tilposide as an example, the original Smegglutide was synthesized using DNA recombination technology to synthesize the main chain. Currently, domestic manufacturers mainly use solid-phase synthesis technology for the synthesis of Smegglutide raw materials, such as Tianji Biology, Nortai Biology, and Jianxiang Biology. In the future, if domestic manufacturers provide raw materials to the world, solid-state synthesis will become the most mainstream synthesis method in the GLP-1 field.
If it cannot be launched, the research and development investment of pharmaceutical companies will be 'wasted', "said a person in charge of a domestic pharmaceutical company." Currently, there are no weight-loss products available in China, or because related products require further testing for adverse reactions in patients. If further approval is submitted, relevant departments will also conduct stricter reviews of drug safety
As the only pharmaceutical company approved for weight loss indications to be listed in China, the dynamics of Huadong Pharmaceutical have attracted much attention. The reporter consulted with East China Pharmaceutical regarding product launch and safety issues, but as of press release, no response has been received.
Factors such as unsatisfactory clinical results, inability to obtain expected returns after the product is expected to be launched, and high research and development costs will all lead to the termination of drug development by the enterprise, "said the relevant person in charge of the domestic pharmaceutical company mentioned above.