The "miracle weight-loss drug" that is popular worldwide has finally been approved for listing in China! On June 25th, Danish pharmaceutical company Novo Nordisk announced that its subsidiary product, semaglutide (brand name: NOVOYING), was approved by the National Medical Products Administration (NMPA) and can be used for long-term weight management of adult patients in conjunction with controlled diet and increased physical activity. The operating income of 10-30 billion yuan products was 401/1288/60 million yuan, respectively.
Following this bullish news, Novo Nordisk's American stocks soared on Tuesday, with its stock price rising more than 3% and market capitalization reaching $650 billion, ranking 11th in the U.S. stock market.
This approval is intended for overweight and obese patients with an initial body mass index (BMI, weight (kg)/height (m)²) greater than or equal to 30; or between 27 and 30, and at least one weight-related comorbidity, and is administered once a week. NOVOYING can help qualified patients achieve an average weight reduction of 17% (16.8 kg).
In fact, the Chinese market is "no stranger" to semaglutide. Novo Nordisk's semaglutide injection is divided into two products, Ozempic, the brand name for type 2 diabetes treatment, which is called "NOVOTAI," and Wegovy, the brand name for weight loss indication, which is called "NOVOYING."
Previously, NOVOTAI was approved in China for the treatment of diabetes, although it was not approved for weight loss, it was already well-known, and many people with demand would buy it for weight loss on their own. With the official approval of NOVOYING for weight loss indication in China, the qualified weight loss population can more legitimately gain access to the drug, and it is expected to further open up the Chinese market for hypoglycemic and weight loss indications, and promote the overall growth of weight loss drug sales.
There is a vast market in China! Great expectations for the weight loss drug track.
In the past two years, GLP-1 drugs, represented by Novo Nordisk's semaglutide and Lilly's tirzepatide, have become superstar products for hypoglycemic and weight loss indications and have swept the globe. GLP-1 receptor agonists work by mimicking the physiological effects of the hormone GLP-1 secreted by intestinal L cells. Its indications have expanded from diabetes to obesity, and it was first approved for diabetes in 2005 and for obesity in 2014.
Behind the surge in weight loss drugs is a high incidence of global obesity in recent years, bringing a vast market space. According to Frost Sullivan, the current global obese population has exceeded 50%, and China has a large number of obese patients, with an estimated nearly 330 million by 2030; it is estimated that the medical expenses attributed to overweight/obesity in China will reach 418 billion yuan by 2030, accounting for about 21.5% of the total national medical expenses.
At present, the pricing and whether NOVOYING can be included in medical insurance are still unknown, but the drug was approved in the first half of this year and is expected to participate in this year's national medical insurance negotiations. Novo Nordisk also stated that it will immediately promote the online and in-hospital availability of the drug to help obese patients use and treat it as soon as possible.
NovoTai, the semaglutide used for type 2 diabetes treatment, has already been included in medical insurance in China, with a cost of less than 800 yuan for the 3 mL dose, which can be used for at least one month and is at a relatively low price range globally.
With the "crazy internal integration" of pharmaceutical R&D companies, the indications for GLP-1 are expected to continue to expand, and institutions are also constantly increasing their expectations for the market size of weight loss drugs. Citi expects the market size of GLP-1 weight loss drugs to reach $71 billion by 2035. JPMorgan and Goldman Sachs believe that by 2030, sales of the market may grow to around $100 billion, far exceeding the bank's forecast of only $6 billion earlier this year.
These predicted market sizes have more than ten times growth potential compared to current levels. The approval of NOVOYING in China may once again spark market interest in this track.
How to capture this wave of "weight loss fever"?
In the booming weight loss drug market, there are many investment opportunities for investors from upstream and downstream supply chains to related ETFs in the Hong Kong and US stock markets.
Weight loss drug development pharmaceutical companies
In the current market size of weight loss drugs,$Eli Lilly and Co (LLY.US)$with$Novo-Nordisk A/S (NVO.US)$Two major leaders occupy half the market, and their industry status is difficult to shake in the short term. In the first quarter of this year, Novo Nordisk stated that sales of semaglutide in the United States were four times higher than at the end of last year, and Lilly also reported that global sales of its diabetes drug Mounjaro (also commonly used for weight loss) were more than three times higher than in the same period last year. The two companies' drug sales show a high-growth trend, but they are also accelerating their supply side's capacity expansion, and news of expanding production capacity frequently appears.
In addition, pharmaceutical giant$Merck & Co (MRK.US)$which has the K drug, mainly focuses on oral semaglutide, and has several weight loss indications under development.$AstraZeneca (AZN.US)$In November last year, China's Meheco Group introduced an innovative drug Shangyan platform GLP-1, which is currently being vigorously developed; another multinational pharmaceutical company$Amgen (AMGN.US)$GLP-1/GLP drug AMG 133 of another multinational pharmaceutical company is about to enter phase III clinical trials.
Since the beginning of this year, three pharmaceutical companies, Novo Nordisk, Eli Lilly and Co, and Merck, hit intraday highs overnight, with their stock prices rising by 43%, 55%, and 23% year-to-date, respectively.
Among the innovative drug companies in China,$INNOVENT BIO (01801.HK)$developed Marshdo peptide with Eli Lilly, and the latest data shows that the phase III clinical trial of weight loss is successful. The company is expected to be listed as early as 2024;$CSPC PHARMA (01093.HK)$is laying out a semaglutide generic.
The research and production of innovative peptide drugs have high barriers, and downstream pharmaceutical companies tend to cooperate with professional peptide CDMOs or active pharmaceutical ingredient companies to achieve cost reduction and efficiency improvement. According to Frost & Sullivan's data, GLP-1 class drugs will account for 43.5% of the global peptide market share in 2023 when calculated by sales revenue, and is expected to further increase to 49.7% by 2032. This has also driven the rapid growth of the global peptide CDMO market. In the Hong Kong stock market,
have all made layouts for this business.$WUXI APPTEC (02359.HK)$, $ASYMCHEM (06821.HK)$Weight loss ETFs
In May-June this year, ETF issuers Roundhill lnvestments and Amplify ETFs each issued an ETF with a weight loss drug theme:
Roundhill GLP-1 & Weight Loss ETF (OZEM.US)$Roundhill GLP-1 & Weight Loss ETF (OZEM.US)$, $Amplify Weight Loss Drug & Treatment ETF (THNR.US)$
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