Novartis CEO: Joining GLP-1 obesity race now is 'not prudent'

Novartis CEO Vas Narasimhan, M.D., recently discussed the company's position on the obesity drug market during a second-quarter earnings call. While the breakthrough success of GLP-1 drugs by Novo Nordisk and Eli Lilly has driven many pharmaceutical companies to enter the obesity treatment race, Novartis has opted for a different approach.

Narasimhan explained that Novartis has thoroughly evaluated the possibility of participating in the current market for obesity drugs but concluded that entering with another oral or injectable GLP-1 or GIP would not be wise. The CEO pointed out that the market is already well-served by the existing leaders, Novo Nordisk and Eli Lilly, who are rapidly advancing their follow-on agents. Introducing a similar drug would be challenging due to substantial rebate walls and portfolio blocks expected by the end of the decade.

Despite this, Narasimhan revealed that Novartis is not entirely out of the obesity drug arena. The company is working on next-generation obesity treatments that are still in preclinical development. These innovative drugs aim to offer new benefits, such as longer-acting agents through biologics or siRNAs, which could provide dosing and tolerability advantages or the ability for muscle sparing.

The earnings call took place a year after Novartis decided to remove an obesity candidate from its pipeline. This candidate, MBL949, focused on GDF-15, showed disappointing efficacy in a midstage trial. The removal of MBL949 signaled the company's cautious approach to entering the competitive obesity drug market.

The obesity drug market is estimated to be worth around $130 billion, making it an attractive target for many pharmaceutical companies. Novo Nordisk's CagriSema, which combines the active ingredient in its successful weight loss drug Wegovy with an amylin analogue called cagrilintide, is currently considered the most valuable R&D project in the industry. The second most valuable program is Lilly's GLP-1 agonist called orforglipron. Despite the dominance of Novo Nordisk and Lilly in the market, there remains significant potential for new obesity drugs to make an impact.

Recently, Roche announced positive early-stage clinical data for one of two GLP-1 assets it acquired through its $2.7 billion acquisition of Carmot Therapeutics. This development underscores the ongoing interest and investment in obesity treatments across the pharmaceutical industry.

In summary, while Novartis has decided not to compete directly with existing GLP-1 or GIP drugs in the short term, the company is quietly working on next-generation obesity treatments that could offer unique benefits. This strategy reflects Novartis’ commitment to innovation and careful consideration of market dynamics in the competitive landscape of obesity drugs.