If you want to select the concept with the highest attention in the capital market in 2023, the "slimming elixir" is undoubtedly the best choice. Musk's shout, the years of entanglement between the two giants, and the intense pursuit of large amounts of funds have collectively created this capital feast.
As the absolute protagonist in the feast, the founder of the "weight loss miracle drug" Smeglutide - the Danish pharmaceutical giant Novo Nordisk - is constantly expanding its market imagination.
On November 14th, according to the official website of Clinicaltrials.gov, Novo Nordisk registered a phase 3 clinical trial of CagriSema and Tilposide head-on for weight loss.
CagriSema is an upgraded version of Smegglutide launched by Novo Nordisk, which is a compound formulation consisting of a long-acting GLP-1 receptor agonist and a long-acting amylin Cagrelinide. In previous studies, it has been proven that its hypoglycemic and weight loss effects are better than Smegglutide monotherapy. The latter achieved approximately $14.5 billion in sales in the first three quarters of 2023, referring to the global 'medicine king'.
Tilposide is a heavyweight product of Lilly Pharmaceuticals. On November 8, Tilpodide (trade name: Zepbound) was approved by the U.S. Food and Drug Administration (FDA) for chronic weight management in adults who are obese (BMI ≥ 30) or overweight (BMI ≥ 27) and have at least one weight related complication (such as hypertension, dyslipidemia, type 2 diabetes, obstructive sleep apnea or cardiovascular disease), which needs to be coordinated with reducing dietary calories and increasing exercise.
Tilposide is coming with great force. Lilly has previously initiated a head to head comparison between telpol and smectiglutide, and according to a study published in 2021, telpol has better hypoglycemic and weight loss effects than smectiglutide.
Novo Nordisk and Lilly Pinpoint vs. Maimang are a microcosm of the increasingly intense GLP-1 game.
Under the catalysis of the rapidly growing performance of Novo Nordisk and Lilly, as well as the capital market, the concept of "weight loss pills" was born, and more and more enterprises emerged in the corner of this feast. According to Wind data from Times Finance, in the past three months, concept stocks related to "weight loss pills" have achieved a total of over 30 limit ups and nearly 50 appearances on the Dragon Tiger List. Among them, Changshan Pharmaceutical has seen a range increase of nearly 140% in the past three months, becoming the leader of "weight loss pill" concept stocks in this range.
Although multiple weight loss drug concept stocks have seen significant pullbacks at the moment, the wealth creation myth of weight loss drugs has not yet come to an end. According to JPMorgan Chase, by 2030, driven by the duopoly of Novo Nordisk and Lilly, the annual sales of GLP-1 receptor agonist related drugs will exceed $100 billion.
The current investment heat in the weight loss medicine sector is relatively moderate, with a global market of hundreds of billions of dollars and huge market potential, "Yifeng Capital told Times Finance.
Duopoly monopoly
GLP-1 will become the most popular celebrity target at present, with two major oligarchs - Novo Nordisk and Lilly being the most important pushers. In the competition between the two sides, GLP-1 drug underwent several iterations of development and ultimately created today's "weight loss miracle drug".
GLP-1, also known as glucagon like peptide-1, is a peptide hormone encoded by the human glucagon gene and secreted by intestinal L cells. It can promote insulin synthesis and secretion, inhibit appetite, and delay gastric emptying. The research on GLP-1 has a long history. In 1932, the concept of "pancreatic stimulating hormone" was first proposed. Currently, there are two main types of pancreatic stimulating hormone known in the human body, namely GLP-1 and GIP (glucose dependent insulin releasing peptide).
In 2005, the first GLP-1 drug in human history, exenatide, was approved by the US FDA. This drug originated from a patent by endocrinologist John Eng, which Lilly showed interest in in 1996. However, John Eng ultimately chose to collaborate with another company, Amylin. The defeat in the first patent battle did not make Lilly lose interest in GLP-1. In 2002, Lilly reached a joint development agreement with Amylin and ultimately completed the launch of Exenatide.
However, exenatide is a short-acting GLP-1 receptor agonist with a half-life of only about 2-4 hours, requiring twice daily administration, and has low structural homology with natural GLP-1. Therefore, exenatide's performance in the commercial market is not impressive, and Lilly and Amylin also parted ways in 2011.
In 2009 and 2010, Novo Nordisk's Lilalutide (trade name: Victoza) was approved by the European Drug Administration (EMA) and the US FDA for the treatment of type 2 diabetes. Compared with exenatide, liraglutide has a longer half-life and only needs to be administered once a day. The amino acid sequence of liraglutide is more similar to that of human GLP-1, which means that liraglutide has better safety.
Not long after, Novo Nordisk expanded the indications of GLP-1 receptor agonists to weight loss scenarios for the first time. In 2014, the US FDA approved the use of liraglutide for weight loss in adult obese patients (trade name: Saxenda).
Liraglutide is the first true 'blockbuster' on the GLP-1 track. Driven by the dual indications of hypoglycemic and weight loss, in 2018, the sales of Victoza+Saxenda exceeded the DKK 28.2 billion mark, ranking first in GLP-1 drug sales.
After the loss of Exenatide, Lilly was not discouraged. In 2014, Lilly launched Dulaglutide, reducing the frequency of administration to once a week. In 2019, the sales of dulaglutide reached 4.13 billion US dollars, and it has completed the reverse targeting of linaglutide in hypoglycemic indications. In the following period, the sales of Dulaglutide continued to rise, reaching $5.068 billion, $6.472 billion, and $7.44 billion respectively from 2020 to 2022.
In 2017, Novo Nordisk's Smegglutide was born. In 2021, the weight loss indications of Smeglutide were approved, and its approved dosage forms were increased to three, namely Ozempic (injectable hypoglycemic drug), Wegovy (injectable weight loss drug), and Rybelsus (oral hypoglycemic drug). In 2022, Ozempic's sales exceeded DKK 59.7 billion (approximately $8.4 billion), and the total sales of three formulations of Smeglutide reached DKK 77.2 billion (approximately $10.8 billion), making it the best-selling drug on the GLP-1 track.
In the first three quarters of 2023, Smeglutide continued to maintain rapid growth, with a total revenue of over DKK 100.2 billion (approximately $14.5 billion) from three dosage forms, giving it the opportunity to become the "king of medicine" this year. Based on this performance, Novo Nordisk expects annual sales to increase by 32% to 38%, and operating profit to increase by 40% to 46%.
Due to the unsatisfactory effect of Dulaglutide in the field of weight loss. In order to "win back the game," Lilly placed a bet on the GLP-1/DIP dual receptor agonist telposide. In May 2022, the indication for type 2 diabetes of tilpoleptide was approved, and the product was rapidly released. According to Lilly's third quarter report, the sales revenue of Tilposide in the third quarter of 2023 has reached 1.4 billion US dollars, a year-on-year increase of 650% and a month on month increase of 44%; The sales revenue of Tilposide in the first three quarters has approached $3 billion.
On November 8, 2023, the weight loss indication of Tilposide was also approved by the US FDA.
Lilly announced that Tilposide, a weight loss drug, is expected to be launched in the United States by the end of this year in six doses, priced at $1059.87, which is about 20% lower than the selling price of Novo Nordisk Wegovy (the weight loss indication product name of Smeglutide).
The approval of the weight-loss indication for Tilposide has added further suspense to the debate over the "weight loss medicine king". Novo Nordisk and Lilly, who have been battling for nearly 20 years on the GLP-1 track, are far from winning or losing.
Celebrities and pharmaceutical companies compete to "test drugs"
The rapid popularity of Smegglutide is closely related to the celebrity's "sales".
In October 2022, Tesla CEO Elon Musk publicly announced on Twitter that he had lost 9 kilograms of weight within a month by regularly fasting and taking smectide. Under the personal promotion of Musk and social media, Smegglutide was quickly sought after as a "weight loss miracle drug", sparking a weight loss storm in various circles.
Seeing the potential hype potential of the concept of "weight loss pills", many companies have also personally stepped down to play the "edge ball".
On October 12th, Yuan Jiandong, Chairman and General Manager of Borui Pharmaceuticals (688166. SH), claimed during a conference call on "Big Guys Interpreting the GLP-1 Whole Industry Chain Series Exchange Conference" that he had tried the company's research product BGM0504 Injection, and in almost two months, his body weight decreased from 91 kilograms to 76 kilograms.
Under the promotion of the chairman's personal drug testing, Borui Pharmaceutical raised the limit the next day.
But a few days later, the Jiangsu Securities Regulatory Bureau decided to take administrative regulatory measures against Yuan Jiandong by issuing a warning letter and recording it in the integrity records of the securities and futures market.
Borui Pharmaceuticals is not the only company that has been punished for "rubbing against the concept".
On November 9th, the Shanghai Stock Exchange announced a notice of criticism against Baihua Pharmaceutical (600721. SH) and its board secretary Cai Ziyun. The reason is that Baihua Pharmaceutical has responded to investors' questions multiple times on the Shanghai Stock Exchange's interactive platform since September 15th, stating that "Huawei Pharmaceutical, a wholly-owned subsidiary of the company, can provide research and development services for related drugs such as Liraglutide injection and Smeglutide injection" and "there is a weight loss product in the research project".
However, according to further disclosure by Baihua Pharmaceutical, the weight loss drug project commissioned by the client is currently in the research and development process and has entered the clinical trial stage. After the commissioned research and development is completed, the research and development results will be transferred to the client. The company does not have any related drug production and sales business, and the revenue of this project in 2022 only accounts for 0.3% of the company's annual revenue.
On October 16th, Baihua Pharmaceuticals once again clarified in the risk warning notice that the above-mentioned "weight loss drug" project is Orlista, with a contract amount of no more than 11 million yuan and an annual revenue of only about 1 million yuan in 2022. As for Liraglutide and Smeglutide, Baihua Pharmaceutical has only conducted preliminary research on synthesis route screening and pilot testing, and there is significant uncertainty in subsequent research and development. Currently, no clients have entrusted Baihua Pharmaceutical with research and development.
From disclosing the company's weight-loss products to clarifying the announcement, Baihua Pharmaceutical's stock price has risen several times during this period, with a cumulative increase of nearly 50%.
The Shanghai Stock Exchange believes that during a period of high market attention to weight-loss drug related concepts, listed companies should be more cautious in releasing relevant information, ensuring authenticity, accuracy, completeness, and fully alerting to risks. However, Baihua Pharmaceutical only supplemented the disclosure of relevant information after regulatory supervision, which violated the regulations. Therefore, it is decided to issue a notice of criticism to Baihua Pharmaceutical and Cai Ziyun, and to report the disciplinary action to the China Securities Regulatory Commission and record it in the integrity records of the listed company.
On November 6th, the Shanghai Stock Exchange also issued a notice of criticism on Kanghui Pharmaceutical (603139. SH) and related responsible persons. On October 13th, Kanghui Pharmaceuticals announced on the investor platform that its holding subsidiary, Shaanxi Youbang, can produce intermediates of hypoglycemic/weight loss drugs Smeglutide and Tilposide. A few days later, after regulatory supervision, Kanghui Pharmaceutical clarified that it currently does not have the production capacity for the intermediates of Smegglutide and Tilposide.
In addition to the significant effect of celebrity "bringing goods", Times Finance has observed that the acquaintance effect of Smegglutide is also very obvious.
Gong Mo, the founder of Leading Capital, told Times Finance that he is using Smeglutide to reduce weight, and many friends in the investment and medical circles around him have also used it.
Xiao Han (pseudonym) from the media industry has been using Smeglutide for nearly a year. She told Times Finance, "I learned about this drug from another friend, and I know that several friends around me are using it
Capital Relay Race
With the increasing popularity of the concept of weight loss pills, investment and financing and BD (business expansion) transactions within the industry have become active, and the prices of GLP-1 related research and development pipelines have skyrocketed.
According to Debang Securities Research Report, a total of 6 projects were achieved from April 2022 to June 2023, with a total amount exceeding 800 million yuan.
Yifeng Capital, which has always been focused on biopharmaceutical investment, told Times Finance that Yifeng Capital had participated in Hongyun Huaning's angel round investment as early as 2016, with an investment amount of tens of millions of RMB; In 2018, Yifeng Capital added another round of investment in the A-round financing. Hongyun Huaning has an exclusive GPCR antibody development technology platform, and its core product, Glutazumab, is the only monoclonal antibody type GLP-1 receptor agonist in the world, currently in clinical phase 3.
In June 2023, China Biopharmaceutical (01177. HK) and Hongyun Huaning reached a cooperation agreement to jointly develop the dual target weight loss innovative drug GMA106. China Biopharmaceutical obtained exclusive development and commercialization rights for the drug in Greater China, while Hongyun Huaning could receive a down payment and milestone payment of up to $57 million.
On November 9th, AstraZeneca announced an exclusive license agreement with Chinese biopharmaceutical company Chengyi Biotech for the small molecule GLP-1 receptor agonist ECC5004. AstraZeneca can obtain exclusive rights to develop and commercialize the drug for all indications in all countries and regions outside of China, and the development and commercialization rights in China will be shared by AstraZeneca and Chengyi Biotech.
ECC5004 is a low-dose oral drug that needs to be administered once a day and can be used to treat obesity, type 2 diabetes and other potential complications. The preliminary results of the Phase I clinical trial showed that ECC5004 has differentiated clinical advantages, good tolerance compared to placebo, and can promote blood sugar and weight loss. According to Clinicaltrials.gov, this phase 1 clinical trial was completed in October.
For this drug that has just completed its Phase 1 clinical trial, AstraZeneca has offered a total price of $2 billion for the first $185 million, up to $1.825 billion in clinical, registration, and commercialization milestone payments, as well as graded royalty fees for net product sales.
However, the frenzy in the capital market has also made some investors hesitant.
According to observations, there are currently many investors on the sidelines, but very few who have actually taken action. On the one hand, the investment environment for biopharmaceuticals is becoming calm; on the other hand, the market is too inward bound, and everyone is observing who can 'roll in', "Gong Mo told Times Finance.
Yifeng Capital pointed out to Times Finance that there are many pharmaceutical companies globally deploying GLP-1 receptor agonists, but the vast majority are peptide products, with little difference in the same type of products. In the future, it is indeed easy to form a competitive "internal competition" situation. However, as a new generation of hypoglycemic and weight loss drugs, GLP-1 receptor agonists have enormous market potential, and their penetration rate and market size are also increasing as they compete among products.
From the research and development perspective, peptide products are the most common, followed by small molecule drugs, and monoclonal and double antibody agonists are the least. Therefore, the layout of monoclonal antibodies, especially double antibody type GLP-1 receptor agonists, is a differentiation route and breakthrough point. From an investment perspective, the future core focus will still be on mid to late stage products, and investing in early stage products requires special attention to the advantages of differentiation. "Yifeng Capital stated.