GLP-1 Inhibitors

From Tokyo, Japan and Changsha, China – this is Down to Business English. With your hosts Skip Montreux and Dez Morgan. Skip! Do my eyes deceive me? What are you talking about Dez? If I’m not mistaken, it looks like you’ve lost a bit of weight. You’re not the first person to notice that. As a matter of fact, yes. I have dropped a few kilograms over the past month or so. How did you manage that? You're not taking one of those weight loss drugs, are you? You mean a GLP-1 inhibitor drug?

Like the Ozempic or Wegovy? Yeah, that was the type of drug that I was referring to. No, nothing like that. I’ve just been eating better and trying to get a bit more exercise. Well done, keep it up. I’ll do my best. But it’s funny you brought up those drugs. Didn’t we report on them a while back? Yes, we did, as a matter of fact. Over 100 episodes ago, in D2B 289. And interestingly enough, GLP-1 drugs happen to be the focus of my report today.

Are you going to give us an update on the weight loss drug market, then? That’s part of it. But I also want to report on a recent acquisition that will definitely shake up the market. Sounds interesting. So let’s do it. Let's get D2B … Down to Business with the GLP-1 inhibitors.

Who are the big players? What products do they make? And who has just entered this lucrative market? Anyone who’s familiar with the weight loss drug market, or indeed who listened to D2B 289 back in December 2023, will know that the biggest player in this sector is the Danish pharmaceutical company, Novo Nordisk. And they have two different drugs on the market — Ozempic and Wegovy. Those are the two top-selling weight loss products out there, yes.

Remind me, what is the difference between Ozempic and Wegovy? Good question, as they are very similar. Both include the active ingredient semaglutide, which is a synthetic version of a hormone our bodies naturally produce to control blood sugar levels and suppress our appetite. So why two drugs? Ozempic was originally developed to treat type 2 diabetes whereas Wegovy is specifically geared for weight loss. Oh, now I remember.

But if memory serves me, Ozempic is also prescribed off label for weight loss, not just for diabetes. That’s right and by off label, you are referring to the practice of prescribing a drug for a purpose different to the one it was approved to treat. That’s what I mean, yes. So, in this case Ozempic is being prescribed to treat weight loss although It's not the primary purpose it was approved for. Exactly, it was approved to treat type 2 diabetes. Weight loss was a secondary benefit.

But of course, Novo Nordisk has Wegovy for that purpose. Why the two different products if they are basically the same drug? Why go to all the trouble of marketing two brands? Another excellent question, Dez. It comes down to dosage and intended use. Dosage? Meaning the amount a patient takes? Yes. As Ozempic was developed to treat diabetes the dosage is calibrated to control blood sugar levels.

Wegovy on the other hand is designed for weight management and uses a higher dose of semaglutide and achieves stronger appetite-suppression effects. Got it. Yeah, that makes sense. In any case, Novo Nordisk is without a doubt, the market leader in the overweight or obesity market . With two products out there, they should be. According to Novo Nordisk’s 2024 Annual report, Wegovy has a 57% market share. Oh, that’s substantial. Shareholders must be pretty happy with that.

But there is a new GLP-1 kid on the block that is quickly eroding Wegovy’s position, especially in North America.

Really? Now, who would that be? That would be Eli Lilly’s weight loss products, Mounjaro and Zepbound. Eli Lilly is marketing two distinct products as well? Yes. Mounjaro is the diabetes drug and Zepbound is the weight loss medication. And Since entering the market in 2022, Mounjaro has been making inroads into the market and taking a progressively larger share. Why is that? Is it a better pharmaceutical?

It’s all a bit technical, but the clinical trials have shown that the active ingredient in Mounjaro, tirzepatide, is generally more effective for weight loss than semaglutide. The active ingredient in Wegovy and Ozempic. That’s right. So people who take Mounjaro lose more weight than those taking Ozempic? It seems that way.

A major 18 month US study of 751 obese, or overweight patients, found that those taking tirzepatide lost 20.2% of their body weight, compared to 13.7% lost by those taking semaglutide. That is quite a bit more effective. No wonder Mounjaro is eating into Wegovy’s market share. Well, Novo Nordisk products are still the market leader and they have a couple things working in their favor. Like what? One factor is pricing. In most markets, Mounjaro tends to be more expensive. By very much?

It varies depending on the country and insurance coverage, so it’s a little difficult to quote exact numbers. But overall, Ozempic is generally the more affordable of the two, which gives Novo Nordisk a competitive advantage. That certainly works in Novo Nordisk’s favor. Also that clinical trial I mentioned was done with the maximum dosage of both drugs. The maximum dose of Mounjaro is considerably higher than that recommended for Wegovy. And that adds to the price again.

And it could be a reason for the increased weight loss results. And how about side effects? Does one brand have milder side effects than the other? It’s always hard to make broad statements because people respond differently to medications. However, clinical data does suggest that Wegovy is associated with slightly more frequent or more intense side effects compared to Mounjaro. So, that would be a point in Mounjaro’s favor. Possibly, yes. But there is another factor to consider.

At the moment, Mounjaro is only available as a weekly injection. But if you take Wegovy, you have a choice between giving yourself a weekly injection or taking a more convenient daily tablet. So the conundrum for consumers is choosing between price and convenience versus the potential for greater weight loss. Well, many people do very well on Wegovy, but based on current studies, that is an accurate summary.

So that’s the current market and those are the two heavyweights, Novo Nordisk and Eli Lilly. You said something about another company recently entering the market? I did. What’s that about? In early November this year, Pfizer finalized a deal to buy the Californian biopharma startup Metsera for a purchase price of up to $10 billion. Up to? What does that mean? They haven’t settled on the final price?

The deal is structured like this — Pfizer has offered to pay $65.60 per share with an additional $20.65 per share, contingent on Metsera’s drugs passing certain FDA tests. If Metsera passes all the tests, the deal will amount to around $10 billion. That does sound like a lot of money. Yes, it does. In late September both companies actually had agreed to … on a valuation of up to $7.3 billion. I’m confused, why would Pfizer up its offer? Well, this is where the story gets very interesting.

At the 11th hour a competitor put in a counter bid of $9 billion, pushing the price up. Guess who that bidder was. I would say then it must be either Eli Lilly or Novo Nordisk. Yeah, but which one? I am going with Novo. Am I right? Well guessed, Dez. You are 100% correct. But I don’t get it. If Novo Nordisk already has successful GLP-1 drugs in the market, why would they want to buy Metsera? This is a little technical as well, but I’ll … I’ll give it a go.

Metsera’s GLP-1 receptor agonist, currently known by the code name of MET‑097i, is much longer lasting than other GLP-1 drugs. The bottom line is it only requires one injection a month. Once a month! That’s way better than the weekly injections. Metsera also has a second drug in development, MET-233i, which is an amylin analogue. Early studies suggest that when it’s combined with a GLP-1 receptor agonist, patients may achieve even greater weight loss than with either drug alone.

Well you’re right, that was pretty technical, but I do follow you. What exactly though is an amylin analogue? Amylin is a hormone released by the pancreas. It helps you to feel full and slows down how quickly food leaves your stomach. In other words, it makes you forget about food — yeah, I got it. So what you're saying is by taking the two drugs together, people feel full even quicker. That is the bottom line, yes.

If those two drugs do indeed work well together, this deal could be a major coup for Pfizer. And it seems Novo Nordisk was well aware of that, so they put in a bid of their own. And why didn’t Metsera accept that bid? In the end, Novo Nordisk’s board of directors decided to withdraw their offer after US regulators warned that their acquisition would raise antitrust concerns. So, they didn’t want to risk a long, expensive legal battle then.

On top of that, Pfizer actually filed a lawsuit against Novo Nordisk. They claimed Novo’s counter-bid was an “illegal attempt” to block a potential competitor from entering the market. Er, I would have to say they kind of had a point there. In any case, Novo’s offer didn’t go through and Pfizer successfully acquired Metsera. And the extremely lucrative weight loss market suddenly has a new player in town. That it does.

And on that note, I think it is time for us to get D2V … Down to Vocabulary. Alright, let’s kick off today’s Down to Vocabulary with our first word ‘acquisition’. An acquisition is the process of getting something. In business, an acquisition is when one company buys another company, or a large part of it. You’ll hear this term a lot in the business news, especially when companies want to grow quickly, enter a new market, or gain new technology or expertise.

One of the main topics in today’s episode was Pfizer’s acquisition of Metsera, and why they bought the company to enter the GLP-1 market. You also explained how Novo Nordisk’s board of directors decided to withdraw their offer for Metsera, after US regulators warned that the acquisition would raise antitrust concerns. In simpler terms, Novo Nordisk decided not to buy Metsera because it would probably cause them a lot of legal issues. Can you give us another example using acquisition Dez?

Sure, I’ll give you a very recent example using the verb form of acquisition. Earlier this month there was some huge news in the media industry when Netflix announced they had acquired Warner Bros. Discovery. Yes, that is big news. We will need to do an episode on that sometime. I agree. I'll look into that. The next word on our list is the expression ‘go to the trouble of’.

When you go to the trouble of doing something, you make a special effort to do it, especially when it takes time, money, or extra work. This expression suggests that the action isn’t strictly necessary, so the speaker is asking why someone would bother doing it, or they are wondering why they are doing it. In the report, I used this expression when I asked Skip why Novo Nordisk would go to the trouble of marketing two brands — Ozempic and Wegovy — when they are based on very similar drugs.

In other words, I was asking why the company would make the extra effort to manage two products instead of just one. Here’s a question you might hear in a B2B meeting.