Drugmakers race to find a place in the next wave of obesity drugs

Pharmaceutical companies are already positioning themselves for the next chapter of obesity treatment, even as the industry is only beginning to adapt to the rapid adoption of GLP-1 medicines and evolving insurance coverage for weight-loss drugs.

At the American Diabetes Association's Scientific Sessions in New Orleans, drugmakers presented new data and outlined strategies aimed at capturing a share of a market currently dominated by Eli Lilly and Novo Nordisk. The presentations highlighted a growing pipeline of pills, longer-lasting injections and entirely new drug classes designed to improve effectiveness and reduce side effects.

The obesity drug market has emerged as one of the fastest-growing sectors in healthcare. Analysts expect annual sales to eventually exceed $100 billion, driven by rising obesity rates and increasing acceptance of obesity as a chronic disease requiring long-term treatment.

Lilly and Novo continue to lead the market

Eli Lilly and Novo Nordisk remain the dominant players in obesity medicines through their blockbuster products Zepbound and Wegovy.

Both companies have expanded their portfolios by introducing oral GLP-1 treatments earlier this year. Novo Nordisk said prescriptions for its Wegovy pill surpassed 3 million within five months of launch, suggesting that oral formulations could bring millions of additional patients into the market.

Lilly also introduced its small-molecule pill Foundayo, previously known as orforglipron, providing patients with an alternative to injections.

Executives from both companies argued that pills could significantly expand access by appealing to individuals reluctant to use weekly injections.

Their strong commercial positions and extensive manufacturing capabilities have allowed the two pharmaceutical giants to establish an early lead, although competitors believe there remains substantial room for additional entrants.

New competitors seek to break the duopoly

Several companies are developing therapies they hope can challenge the dominance of Lilly and Novo.

Structure Therapeutics and AstraZeneca each presented mid-stage clinical data on their respective oral GLP-1 candidates. If Phase 3 studies are successful, the drugs could reach the market around 2029.

Structure Therapeutics Chief Executive Ray Stevens said competition would ultimately benefit patients and stressed the importance of becoming the second major small-molecule obesity pill after Lilly.

Pfizer also unveiled promising mid-stage results from a drug obtained through its $10 billion acquisition of Metsera. Unlike current weekly injections, the therapy could potentially be administered once every month.

Amgen is pursuing a similar strategy with a drug candidate that may eventually require injections only once a month or even once every three months.

Susan Sweeney, Amgen's executive vice president for obesity and related conditions, said reducing treatment frequency could represent a major advantage for patients living with obesity.

Drugmakers explore alternatives beyond GLP-1

While GLP-1 drugs have transformed obesity treatment, companies are increasingly exploring entirely new biological pathways.

One promising target is amylin, a hormone naturally produced in the pancreas that helps regulate appetite and promotes feelings of fullness.

Zealand Pharma, which is developing the drug petrelintide in partnership with Roche, presented mid-stage data showing patients lost nearly 11 percent of their body weight.

Although that result trails the performance of current blockbuster therapies such as Wegovy and Zepbound, researchers noted that vomiting occurred less frequently among participants compared with those receiving placebo treatment.

Zealand Chief Executive Adam Steensberg predicted that amylin drugs could represent an "iPhone moment" for obesity medicine by delivering a better patient experience with fewer gastrointestinal side effects.

Market leader Eli Lilly is also investing heavily in this area and already has an amylin analogue, eloralintide, in Phase 3 trials.

Scientists believe future obesity treatments may combine multiple hormones and pathways to maximize weight loss while improving tolerability.

Retatrutide delivers unprecedented weight-loss results

Among the most closely watched presentations at the ADA conference were Phase 3 data for Eli Lilly's experimental drug retatrutide.

Retatrutide simultaneously activates GLP-1, GIP and glucagon receptors, making it a so-called triple agonist.

Clinical trial participants taking the highest dose and adhering to treatment experienced average weight loss of approximately 28 percent of body weight, representing one of the strongest results observed in obesity medicine.

According to Lilly Chief Executive Dave Ricks, the therapy could provide an important option for patients with severe obesity, particularly those with body mass indexes exceeding 40.

Nearly half of participants lost more than 30 percent of their body weight, results that could enable patients with severe obesity to achieve healthier weight ranges that may not be attainable with current therapies.

Experts believe retatrutide could become one of the most powerful treatments available if regulators ultimately approve the drug.

Pricing and access remain major questions

Investors are now debating whether the obesity drug industry will remain largely a two-company market or evolve into a more competitive landscape.

According to the World Health Organization, approximately 2.5 billion people worldwide are considered overweight, while around 890 million are classified as obese.

Goldman Sachs analyst Asad Haider said the key issue may not be demand but pricing.

Over the past year, both Eli Lilly and Novo Nordisk have lowered prices for some weight-loss products while competing with each other and with compounding pharmacies offering cheaper alternatives.

The companies have also pushed to improve insurance coverage and reimbursement. Millions of Medicare beneficiaries are expected to gain access to obesity medications with out-of-pocket costs of roughly $50 per month.

Greater insurance coverage could dramatically expand the number of patients receiving treatment and intensify competition among manufacturers.

Obesity treatment may become increasingly personalized

Novo Nordisk Chief Executive Mike Doustdar suggested that obesity should be viewed similarly to mental health disorders, where different conditions require different medicines and treatment approaches.

Industry leaders increasingly believe obesity will not be treated with a single class of drugs. Instead, physicians may tailor therapies based on patient characteristics, severity of disease, side-effect profiles and treatment goals.

The growing pipeline of oral medications, monthly injections and novel mechanisms suggests the market may eventually evolve beyond the current dominance of GLP-1 therapies.

For now, Eli Lilly and Novo Nordisk continue to hold commanding positions, but the next decade could bring a much broader array of treatment options as dozens of companies compete for a share of one of healthcare's most lucrative opportunities.