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JPMorgan just lately raised its projections for weight reduction medication, anticipating the drug class often known as GLP-1 agonists to deliver over $100B in annual gross sales by 2030 in a duopoly managed by Novo Nordisk (NVO) (OTCPK:NONOF) and Eli Lilly (NYSE:LLY).
In a analysis be aware final week, JPMorgan analyst Chris Schott stated that he didn’t rule out additional gross sales upside for GLP-1s in weight problems and diabetes, the place the uptake of the drug class is quick rising amid social media hype.
JPMorgan’s revised estimate follows LLY’s better-than-expected Q2 gross sales for its twin GIP/GLP-1 agonist, Mounjaro. It additionally comes after Novo (NVO) introduced topline information from its Section 3 SELECT trial in August, demonstrating that its GLP-1 agonist semaglutide introduced cardiovascular advantages in weight problems.
In 2021, Novo (NVO) launched semaglutide as Wegovy for weight reduction after advertising a lower-dose model of the drug, as Ozempic for sort 2 diabetes. The medication focused at a intestine hormone referred to as incretin helped the Danish drugmaker turn out to be probably the most worthwhile European firm this month.
“From a market share perspective, we see the incretin market largely remaining a duopoly between LLY and Novo,” Schott wrote.
Nevertheless, rising reputation and Mounjaro’s off-label use for weight reduction have pressured provides and led to copycat variations, with a month’s provide of semaglutide costing as a lot as $1.5K.
JPMorgan expects GLP-1 costs to say no over time amid enhancements in provide and entry. The agency tasks GLP-1 pricing to achieve $325–$350 per remedy, implying a $4K annual price by the top of the last decade.
In July, JPMorgan dominated out a “winner-takes-all competitors” within the weight problems drug market, the place potential new entrants might embody Pfizer (PFE) and Amgen (AMGN), that are additionally advancing GLP-1 candidates.
With Eli Lilly (LLY) anticipated to obtain FDA approval this 12 months to market Mounjaro for weight reduction, the inventory stays one in all JPMorgan’s favorites amongst GLP-1 builders with an Chubby ranking and a $600 per share goal.
“We see significant upside to Road estimates for Mounjaro and LLY’s broader incretin portfolio over time in addition to a positive setup on the inventory heading into numerous vital catalysts in 2023 and early 2024,” Schott wrote.
A possible FDA approval of the corporate’s Alzheimer’s remedy donanemab and full information from Novo’s (NVO) SELECT trial are amongst a few of the occasions that would drive LLY’s shares increased, the analyst identified.
JPMorgan stands forward of the consensus on LLY’s GLP-1 prospects, anticipating the drug class to deliver ~$50B in gross sales in 2030 for the corporate, up from ~$8B, ~$23B, and ~$34B in 2022, 2025, and 2027, respectively.
Its 2030 forecast is underpinned by excessive weight problems charges within the U.S. (35%–40% prevalence amongst adults) and enhancing reimbursements over time, together with potential Medicare protection for weight problems medication by the top of the last decade.
JPMorgan additionally highlights LLY’s next-gen weight reduction medication, notably the oral GLP-1 agonist Orforglipron, which prompted as much as ~15% weight reduction after 36 weeks of remedy in a Section 2 trial.
