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Morgan Stanley says that world weight problems gross sales in 2030 might attain $54B, pushed by Eli Lilly (NYSE:LLY) and Novo Nordisk (NVO) (OTCPK:NONOF), whereas different large-cap pharma gamers carefully watch their dominance amid rising information from new biotechs.
Weight problems, outlined as a physique mass index of over 30, affected greater than 650M adults worldwide in 2016, with a virtually threefold rise within the prevalence since 1975, the World Well being Group factors out. The WHO identifies weight problems because the irregular or extreme accumulation of fats that causes danger to well being.
The situation, categorized as a continual illness by the American Medical Affiliation in 2013 and the European Fee final 12 months, “is on the cusp of shifting into mainstream major care administration,” Morgan Stanley analysts wrote in a analysis word final week.
The group led by Mark Purcell likens the present weight problems market to the mid-to-late Eighties marketplace for hypertension therapies, which expanded to a $30B alternative by the tip of the Nineties. Citing a bottom-up mannequin and conservative pricing assumptions, the agency contends that the worldwide weight problems gross sales might attain $54B in 2030, propelling the situation to one of many high 12 remedy areas, up from the present $2.4B.
In response to Morgan Stanley, a number of elements might begin to unlock the potential of the weight problems market within the subsequent six months, together with an interim information readout for Novo’s (NVO) FDA-approved weight reduction remedy, Wegovy (semaglutide), set for 3Q 2022.
The landmark examine SELECT will show a 27% decline within the danger of coronary heart assaults, strokes, and cardiovascular deaths for the GLP-1 receptor agonist, the analysts wrote, calling the occasion “a key issue to enhance weight problems market entry.”
Purcell and the group additionally suppose that the removing of provide constraints on Wegovy in 3Q 2022 might unleash the underlying demand for the remedy in 2H 2022. In December, Novo (NVS) disclosed that manufacturing points at a contract producer might affect the U.S. provides of Wegovy within the first half of 2022.
In different predictions, Morgan Stanley tasks that over time, 1 / 4 of overweight folks will have interaction with physicians (up from 7% at the moment), and 55% of the sufferers will obtain a brand new anti-obesity remedy.
As for particular person corporations of their weight problems mannequin, the analysts see important upside potential for Lilly (LLY), with $22B in complete income attributed to the U.S. pharma large.
The agency has an above-consensus stance on Lilly’s (LLY) tirzepatide, which is already authorised within the U.S. for diabetes. In April, Lilly (LLY) disclosed late-stage information to show the burden loss good thing about tirzepatide in sufferers with out diabetes.
In comparison with $11.7B income for Novo (NVO), Morgan Stanley reiterates its above-consensus 2030 weight problems gross sales forecast for Lilly (LLY) at $6.5B and points an Chubby suggestion for the inventory, categorized as a “High Decide” of the agency.
As well as, Purcell and analysts suppose that the large-cap pharma gamers with a industrial foothold in cardio-metabolic illnesses might search for in-licensing to interrupt the “duopoly” of Novo (NVO) and Lilly (LLY) in weight problems.
The analysts spotlight that biotechs similar to Altimmune (ALT), Zealand Pharma (ZEAL) (OTCPK:ZLDPF), Hanmi, Regor Therapeutics, Sciwind Biosciences, and vTv Therapeutics (VTVT) are set to generate proof of idea information for his or her weight reduction drugs over the subsequent 6–12 months.
Asian biotechs Chugai Pharmaceutical (OTCPK:CHGCF) (OTCPK:CHGCY), Innovent Biologics (OTCPK:IVBIY) (OTCPK:IVBXF), and Swiss biotech PolyPeptide Group supply income alternatives in diabetes previous to the SELECT readout given their partnerships with Lilly (LLY), the analysts added.
In the meantime, the bullish market dynamics forward of the SELECT information immediate the agency to extend the 2024-29 weight problems gross sales forecasts for Novo (NVO) by greater than 26% and lift its suggestion on the Danish drugmaker to Chubby from Equal-Weight.
Final quarter, Cowen and Guggenheim additionally upgraded Novo (NVO), citing the potential of Wegovy and favorable information from the SELECT trial, respectively. The upgrades got here after the corporate greater than doubled the 2025 gross sales forecast for its weight problems franchise throughout its Capital Markets Day in March.
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