Lilly and Novo Invest Billions to Broaden Obesity Treatments Beyond GLP-1s

Novo Nordisk and Eli Lilly are poised to dominate the obesity market for the foreseeable future. However, as competition is expected to intensify around 2026, both companies are investing heavily in mergers, acquisitions, and licensing deals to maintain their leadership positions.

Currently, Novo’s Wegovy and Lilly’s Zepbound are leading the market, generating $1.7 billion and $1.2 billion in sales respectively during the second quarter. A report from Pitchbook and Morning Star projects that a new wave of competitors, such as Terns Pharmaceuticals, Structure Therapeutics, Pfizer, and Amgen, may challenge these giants. Despite this, Pitchbook estimates that the obesity market could reach $200 billion annually by 2031.

To stay ahead, Novo Nordisk and Eli Lilly have been actively pursuing acquisitions and partnerships. Novo Nordisk has had 37 partnerships focused on cardiometabolic diseases and obesity and is particularly interested in exploring new mechanisms of action. The company is investing significantly in siRNA technology for diabetes and obesity treatments, and expanding its capabilities in proteins, peptides, and monoclonal antibodies. Novo has also added small molecule options to its obesity pipeline through various partnerships and acquisitions.

Lilly, meanwhile, has allocated $1.4 billion to business development, including milestones, acquisitions, and equity investments, in the first half of the year. An additional $4.4 billion was directed toward R&D, with 11 new molecules in development for obesity. Lilly’s CEO, David Ricks, emphasized the company’s strategy to tackle obesity from multiple angles, focusing on various mechanisms and dosage forms.

Recent deals highlight both companies’ aggressive strategies. For instance, Lilly partnered with Haya Therapeutics in September, committing up to $1 billion to discover RNA-guided therapies targeting obesity and other metabolic conditions. Concurrently, Novo entered a $600 million deal with Metaphore Biotechnologies in May to develop next-generation GLP-1 receptor agonists using Metaphore’s MIMIC platform.

In another significant move, Novo acquired Catalent for $16.5 billion in February, gaining control of three manufacturing sites to boost production of its blockbuster drugs, Ozempic and Wegovy. This acquisition aims to support Novo’s revenue from obesity treatments.

Further diversifying its pipeline, Novo signed a $255 million licensing deal with EraCal Therapeutics in January for an oral small molecule program to control appetite and body weight. In the same vein, Novo secured a $532 million agreement with Omega Therapeutics for an epigenomic controller program designed to enhance metabolic activity.

Lilly, for its part, entered a partnership with Fauna Bio in December 2023 worth up to $494 million. This collaboration aims to discover new weight loss targets using Fauna’s AI platform, Convergence, which analyzes genomic data from various animal species. Additionally, Lilly is collaborating with BioAge on a clinical trial pairing BioAge’s apelin receptor agonist, azelaprag, with Lilly’s Zepbound to enhance weight loss potential.

Novo also acquired Embark Biotech in August 2023 for $507 million and signed a research collaboration with Embark Laboratories. Another noteworthy acquisition was Inversago Pharma for $1.1 billion, which brought in a new modality for obesity treatment.

In July 2023, Lilly acquired Versanis Bio for $1.925 billion, gaining access to bimagrumab, a monoclonal antibody that aims to reduce fat without affecting muscle mass. The drug is currently being tested in a Phase IIb study for weight loss.

In summary, both Novo Nordisk and Eli Lilly are strategically investing in acquisitions and partnerships to strengthen their positions in the lucrative obesity market. These moves aim to not only enhance their current offerings but also develop next-generation therapies to maintain their competitive edge.