Novo Nordisk, Eli Lilly poised to divvy up obesity market that could be worth $50B in 2030: analysts

While reimbursement and education challenges persist, drugmakers like Eli Lilly and Novo Nordisk are poised to unlock a global obesity market that could be worth more than $50 billion by the end of the decade, analysts at Morgan Stanley Research wrote in a note to clients Friday.

Novo’s latest semaglutide med, Wegovy, scored its landmark obesity nod last summer. And Eli Lilly’s tirzepatide, recently approved as Mounjaro, has big weight loss ambitions beyond its initial diabetes green light.

Obesity is the “new hypertension,” with the potential to become “the next blockbuster pharma category,” the Morgan Stanley team contends. The condition was officially classified as a chronic disease by the American Medical Association in 2013 and the European Commission last year, with the field now “on the cusp of moving into mainstream primary care management.” This shifting market resembles that for high blood pressure treatment in the 1980s, which transformed into a $30 billion market by the end of the ‘90s, the analysts explained.

“Focus is shifting to the upstream cause as opposed to the downstream consequences of diabetes and cardiovascular disease,” the Morgan Stanley team said. “Therefore we expect excess weight and fat loss to become treatment targets for obesity and for treatment guidelines to adopt obesity as a primary target ahead of other associated diseases.”

All told, global obesity sales could reach $54 billion in 2030, the analysts predict.

Meanwhile, a “confluence of catalysts” is expected to begin bearing fruit over the next 6 months.

Novo Nordisk, for its part, expects to release an interim analysis from its landmark obesity study SELECT in 2022’s third quarter, which the Morgan Stanley team predicts will show that Wegovy helped deliver a reduction in the risk of heart attacks, strokes and cardiovascular deaths.

Further, supply hurdles that previously blunted Wegovy’s launch are expected to blow over in Q3, the analysts added. “[O]nce these shackles are removed, underlying patient demand will be released in the second half of 2022," the team wrote.

Elsewhere, discussions around the disease are evolving, Morgan Stanley said, noting that it’s observed a “virtuous cycle” of “education, word of mouth and heightened demand for weight-loss drugs” on social media.

As for the team’s $50 billion market model, Morgan Stanley analysts figure that over time, some 25% of people with obesity will engage with doctors on their disease, up from 7% today. In turn, the analysts expect around 55% of those patients to be prescribed a new anti-obesity drug.

The analysts singled out Novo Nordisk and Eli Lilly as the clear obesity juggernauts to beat, laying out expectations for each company to capture roughly 40% of the disease area’s revenue opportunity. The team based that assumption on a total of 12 obesity medicines spread out between the rival drugmakers’ pipelines.

For Novo, the Morgan Stanley team expects obesity revenues of $11.7 billion in 2030, while Lilly’s tirzepatide—assuming it clinches an obesity green light—could make around $5.4 billion over that same stretch. Novo’s obesity sales also include Wegovy’s weight loss predecessor Saxenda.

Further, Morgan Stanley figures big biopharma companies with established cardio-metabolic platforms may eventually challenge Novo and Lilly’s “duopoloy,” citing potential biotech players like Altimmune, Zealand Pharma, Regor Therapeutics and more.

One caveat to note? There are still significant obesity education and reimbursement hurdles to overcome, Mizuho Securities and SVB Securities Research analysts wrote in separate notes to clients Friday. Key opinion leaders polled by SVB suggested that despite obesity’s classification as a disease, some payers, policymakers and “even some physicians” still need to be educated on this subject.

And while the opinion leaders Mizuho spoke with were optimistic about the therapeutic potential of the new treatments, “as long as current reimbursement hurdles and challenges remain in place, market uptake of these newer agents … will remain significantly impacted,” the analysts said.