Factbox-Fat, not muscle: Drugmakers in race for next weight-loss breakthrough

Several pharmaceutical companies, including Eli Lilly, Regeneron, Scholar Rock, Roche, Biohaven, Keros Pharma, Northstrive Biosciences, Veru, 35 Pharma, Arrowhead Pharmaceuticals, and AstraZeneca are developing weight-loss treatments that aim to preserve or build muscle mass, addressing a key drawback of current therapies like Wegovy and Zepbound which can lead to muscle loss and increased risk of falls, especially in older patients; these experimental drugs target proteins like myostatin and activin to promote muscle growth while reducing fat, with many combination studies with existing GLP-1 drugs underway and data readouts expected throughout 2024 and 2025.

Analysis

The pharmaceutical sector is actively addressing a critical limitation of current leading weight-loss therapies, such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound, which often induce significant muscle loss alongside fat reduction. This muscle atrophy poses considerable risks, including an increased propensity for falls and diminished overall strength, particularly concerning for elderly patients. Consequently, a diverse array of companies, including Eli Lilly, Regeneron, Scholar Rock, Roche, Biohaven, Keros Pharma, Veru, and AstraZeneca, are advancing novel treatments designed to preserve or even enhance muscle mass during weight loss. Eli Lilly, for example, committed nearly $2 billion in 2023 to acquire Versanis Bio for bimagrumab, a myostatin inhibitor currently in mid-stage trials both as a monotherapy and in combination with Wegovy. Regeneron is evaluating its myostatin antibody, trevogrumab, in conjunction with Wegovy, with study completion expected next year, focusing on metrics like body weight, fat mass, and thigh muscle volume. Scholar Rock's apitegromab demonstrated superior lean mass preservation when combined with Zepbound in a mid-stage study. Veru's oral drug, enobosarm, showed a 71% reduction in lean mass loss compared to placebo when co-administered with Wegovy in a 16-week mid-stage trial. Many of these investigational drugs target proteins like myostatin or activin, with numerous early to mid-stage clinical trial readouts anticipated throughout 2024 and 2025. This intense research and development activity, highlighted by strategic acquisitions and partnerships like AstraZeneca's recent deal with SixPeaks Bio, signals a speculative yet potentially transformative evolution in the obesity treatment landscape, aiming to improve the quality of weight loss.

Key Decisions for Investors

• Investors should meticulously track upcoming clinical trial data readouts scheduled through 2024 and 2025 from companies such as Regeneron, Keros Pharma (Q1 2025), Veru, and 35 Pharma (H2 2024), as these results will serve as pivotal catalysts for individual stock valuations and the broader validation of muscle-preserving weight-loss approaches.
• It is advisable to differentiate potential investments by evaluating the strength of early clinical evidence, such as Scholar Rock's reported lean mass preservation or Veru's significant reduction in muscle loss, alongside the strategic implications of corporate actions like Eli Lilly's acquisition of Versanis Bio and AstraZeneca's collaboration with SixPeaks Bio.
• Considering the inherently speculative nature of early and mid-stage biopharmaceutical development, investors should carefully assess the risk-reward profiles, potentially favoring companies with diversified drug pipelines or established revenue streams to mitigate the specific risks associated with innovation in this nascent sub-sector of obesity therapeutics.