Wednesday, November 8th EST$Eli Lilly and Co (LLY.US)$The heavy-weight diet drug Tirzepatide (tilpotide) has been officially approved by the US Food and Drug Administration (FDA) for long-term weight management for adults. Company executives expect that this diet pill will be launched in the US market soon after Thanksgiving (November 23).
Under the influence of this news, Eli Lilly's stock price rose more than 3%, reaching a new closing high, with a total market value of 587.7 billion US dollars.
Previously, tilpotide was marketed as the drug “Mounjaro” in May 2022 to treat type 2 diabetes, but was not approved as an indication for weight loss. After approval this time, tilpotide for weight loss will be marketed under the name “Zepbound.”
Previously, the Danish drug giant$Novo-Nordisk A/S (NVO.US)$The “diet drug” Wegovy has become popular all over the world. Unlike telpotide, his active ingredient is Semaglutide (semaglutide), and the drug used to treat diabetes is called Ozempic.
The approval of Lilly's diet pills provides a new treatment option for millions of obese and diabetic patients. At this point, Lilly's Zepbound and Novo Nordisk's Wegovy drugs will become the most effective weight loss treatments approved so far, and are expected to share the global weight loss market worth 100 billion US dollars.
Eli Lilly's diet pills work better and are cheaper
Relevant studies have shown that tilpotide can produce better weight loss effects than semeglutide, which can be described as a “ceiling level” in the weight loss industry.
In principle, tilpotide is a dual-targeted receptor agonist that stimulates the release of insulin, increases satiety, and reduces appetite by mimicking two intestinal hormones: GIP (insulin polypeptide) and GLP-1 (glucagon-like peptide-1). Simeglutide, on the other hand, targets GLP-1 only.
GIP can complement the effects of GLP-1 receptor agonists. In preclinical models, GIP has been shown to reduce food intake and increase energy expenditure, leading to weight loss, and may have a greater impact on glucose levels and body weight when combined with GLP-1 receptor agonists.
Furthermore,Judging from the overall efficacy and pricing, tilpotide will also be more “cost-effective”:
Clinical trials have shown that higher doses of Zepbound have an average weight loss of more than 20% over 72 weeks, which is more effective than other approved drugs.
Zepbound has a total of 6 doses, and the list price is $1,060 per month, which is about 20% lower than Wegovy's price of $1,349 per pack.
At the same time,Similar to Novo Nordisk's diet drug Wegovy, Zepbound can also reduce the chance of cardiovascular risk events such as heart attacks and strokes。 The FDA said in a press release, “Obesity and overweight are serious diseases and may be related to some major causes such as heart disease, stroke, and diabetes.” “Given the rising obesity and overweight rates in the US, today's approval addresses unmet medical needs.”
However, Zepbound also inevitably has similar side effects to other weight loss drugs. According to the FDA, Zepbound side effects are mainly gastrointestinal issues such as nausea, vomiting, constipation, and diarrhea. Also included are pancreatic inflammation, gallbladder problems, acute kidney injury, and suicidal behavior or thoughts.
The key to competing for the diet drug market: production capacity and health insurance
According to the financial report released by Lilly last week, revenue for the third quarter was 9.5 billion US dollars, up more than 37% from the previous year, and exceeded expectations of 9.02 billion US dollars.
Among them, the “hero” of the sharp increase in revenue is tilpotide — in just over a year since its drug Mounjaro, which is used to lower sugar, was launched, revenue reached 1.41 billion US dollars, a year-on-year increase of 650%, a 44% increase over the previous year, exceeding market expectations of 1.31 billion US dollars, and accounting for nearly 15% of Lilly's revenue. This is still a situation where weight loss indications have not been approved.
This also means that tilpotide has become one of the fastest-released drugs in pharmaceutical history, completely breaking all records set when simetaglutide was first marketed.In comparison, Wegovy's sales in Q3 surged more than 7 times year on year, and were also close to 1.4 billion US dollars (DKK 9.648 billion), a 28% increase over the previous month.
The future sales performance of tilpotide was also well received by institutions.Morningstar predicts that by 2032, the potential size of the weight loss drug market will be about 60 billion US dollars, and about 21 million people worldwide will take GLP-1R drugs at that time. Eli Lilly will replace Novo Nordisk as the market leader, accounting for about 40% of the market share.
However,Both companies' sales of diet pills are limited by production capacity.They have all made positive efforts to promote the expansion of production.Furthermore, the competition over health insurance coverage will also affect the competitive landscape between the two giants;Currently, US insurers have been reluctant to pay for Wegovy, partly because its cost is too high.
According to Bloomberg's analysis, for Eli Lilly and Novo Nordisk, gaining market share and US health insurance coverage is a necessary condition for maximizing their long-term profits.
Combining the benefits, can Yao Wang Lilai go one step further?
Coincidentally, Eli Lilly also seems to have achieved excellent results in the field of new drugs for Alzheimer's disease. Dr. Daniel Skovronsky, the company's chief scientist, said “extremely optimistic” that a major breakthrough in Alzheimer's disease is coming, and that the drug donanemab may become the next hot topic similar to weight loss drugs (GLP-1).
This is a huge market. According to a report published by the International Alzheimer's Association (ADI), there are currently at least 55 million people with dementia in the world, and it is expected to reach 152 million by 2050, of which about 60% to 70% are Alzheimer's patients.
With the advent of aging, the incidence of Alzheimer's disease is likely to increase even further, yet few new drugs have been developed for it. If Lilly can make significant progress in this area, as Skovronsky said, the pharmaceutical company with the highest market capitalization in the world may still have room to rise, and it will also maintain its position as drug king.
According to the Tipranks analyst rating website, the average target price given to Lilly by 20 Wall Street analysts in the past three months was 644.21 US dollars, which is still 4% higher than the closing price on November 8; the highest target price of 722 US dollars was given by Daimo analyst Terence Flynn.
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