Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Novo Nordisk is ploughing record amounts into research and development as it seeks to stave off growing competition from other pharma groups breaking into the booming weight-loss sector.
Chief executive Lars Fruergaard Jørgensen will face questions on Wednesday about how the company behind the popular Wegovy and Ozempic drugs plans to stay ahead of rivals, as it reports first-half results.
Novo Nordisk leads the field of so-called GLP-1 drugs, which mimic the GLP-1 gut hormone to lower blood sugar and suppress appetite, treating obesity and diabetes.
While the Danish drugmaker reported a 31 per cent rise in sales for 2023, shares in the company have shed 10 per cent in the past month after rival drugmaker Roche unveiled promising early data for a weight-loss pill.
Novo Nordisk now has more than 45,000 people in ongoing or planned trials for semaglutide, the active ingredient in the blockbuster drugs, and CagriSema, a next-generation version of the treatment that combines semaglutide with another compound, a Financial Times analysis of clinical trial data shows.
But US rival Eli Lilly has 50,000 patients engaged in trials for its leading weight-loss treatments: tirzepatide, sold under brand name Mounjaro, and its next-generation retatrutide treatment.
It has invested heavily in manufacturing to meet runaway demand for its products, including through an $11bn takeover of three sites from contract manufacturer Catalent.
But to maintain its position, it is also boosting research and development spending, with ambitions to expand the use of its drugs in treating children, increase international use by replicating results in Asian participants, conduct head-to-head trials with Eli Lilly’s competitor drug Mounjaro and even take on Alzheimer’s disease.
It has historically spent far less than rivals on research and development relative to sales. The company spent $4.7bn — equivalent to 14 per cent of sales — on research and development last year, up from 12 per cent in 2020.
That remains far below Eli Lilly’s 27 per cent.
As the company’s sales rocket higher, analyst and investors expect it to increase spending both to expand its drugs’ uses and to address the future hit to sales from the eventual loss of exclusivity on Ozempic and Wegovy.
“Semaglutide is probably going to be one of the biggest drugs ever, we all know that. That creates some problems: a monster potential patent cliff that they have got to solve,” said Peter Verdult, an analyst at Citi.
“It’s highly unlikely that they are going to find another single product that can replace semaglutide so the strategy very much is to move into adjacent areas around diabetes, cardiovascular and kidney disease.”
Novo Nordisk has already conducted trials on the cardiovascular benefits of Wegovy and, in March, it became the first treatment to win FDA approval for treating heart problems specifically in overweight adults.
Eli Lilly is conducting similar trials on its products and on Thursday reported that tirzepatide reduced the risk of heart failure by 38 per cent.
“We are now moving away from just treating obesity for its own sake and thinking about how the treatments can help with specific obesity-related problems such as fatty liver disease or obstructive sleep apnoea,” said Tricia Tan, a professor of metabolic medicine at Imperial College London.
Among the most “transformative and “exciting” trials, said Verdult, is a late-stage study of semaglutide in early Alzheimer’s due to complete in 2026. There are GLP-1 receptors in the brain and the drugs have shown intriguing early results in slowing cognitive decline in people with Alzheimer’s disease.
But as well as developing understanding of GLP-1s, new trials are “commercially driven” to help companies “solidify market positions”, Tan said.
Studies on the broader health benefits of such drugs can require huge amounts of investment and participation.
“You can show weight loss with 40-50 patients. But these cardiovascular trials have to be much bigger to convince the medical authorities that they are safe to use in these populations,” said John Wilding, a professor of obesity, diabetes and endocrinology at the University of Liverpool who has worked on several large Novo Nordisk studies.
This means new entrants such as Roche, German company Boehringer Ingelheim and others developing new weight-loss drugs will face high costs to replicate the findings. “You can’t simply rely on knowledge about the [GLP-1] class [of drugs],” Wilding said.
Read the full article here