The markets for treating diabetes and obesity are experiencing significant changes. Medications that activate the GLP-1 receptor, like Ozempic, Wegovy, Mounjaro, and Zepbound, have become increasingly popular.
All of these treatments are produced by only two manufacturers. companies that produce drugs or medication , Novo Nordisk ( NVO 2.34% ) and Eli Lilly ( LLY 0.13% ) However, even with little competition currently, various companies of different sizes are seeking to participate. One of the organizations is situated in Switzerland. Roche Holdings ( RHHBY -0.49% ) .
Roche has surprisingly received minimal attention in the weight loss sector’s growing opportunities. However, I believe this is likely to shift in the near future.
I believe Roche has the potential to challenge and outperform both Novo Nordisk and Eli Lilly, making its stock a promising investment opportunity.
What role does Roche play in the weight loss industry?
When companies decide to expand into new markets, the management team must consider whether it is more beneficial to develop new products internally or to acquire them externally. acquisition Utilizing the best approach is recommended.
In the pharmaceutical sector, establishing in-house operations typically involves making significant investments. exploration and innovation Research and development (R&D) can be a time-consuming process for companies, especially when it comes to developing new medications, often taking several years to complete.
There is a significant possibility that companies may invest substantial resources into the development of a groundbreaking medication, only to face failure in the end. The cost of forgoing the next best alternative. In a scenario such as this, the company might have been directing its attention to other areas, resulting in it lagging behind its competitors now.
Companies like Pfizer (NYSE: PFE) and Viking Therapeutics is the name of the company. Roche chose to rival Novo Nordisk and Lilly by creating their own weight loss medications internally, but they separated themselves from the competition through a shrewd acquisition.
In January, Roche completed a transaction. obtaining Carmot Therapeutics — introducing three new potential weight loss treatments to its development portfolio. The experimental drugs are labeled as CT-388, CT-996, and CT-868.
Source of the image is Getty Images.
The reason Roche could potentially be the genuine innovator.
Another crucial aspect to consider in acquisitions is that they tend to be most successful when the asset being acquired is distinct or unique compared to the products already available in the market.
Currently, Novo Nordisk and Eli Lilly’s therapies for diabetes and obesity are given through injections, even though they are widely used. top-selling medications I believe that there are patients who may not feel at ease with having to regularly give themselves injections and would rather have a different option.
CT-388 and CT-868 are also administered by injection. Roche’s CT-996 stands out from the typical GLP-1 receptor agonists. since it is a liquid solution that is taken by mouth rather than being injected.
In July, findings from a phase 1 trial revealed that individuals who used the CT-996 tablet witnessed an average weight reduction of 7.3%, whereas those in the placebo group only saw a 1.2% decrease. These promising outcomes suggest that oral GLP-1 treatments could be similarly effective to the current injectable options available.
A few factors to take into account
While Roche’s GLP-1 pill may appear to be a strategic move, it is important to take into account the entire situation.
Even though Novo Nordisk and Lilly already have injectable weight loss medications available, they are also currently undertaking clinical studies for oral alternatives. amycretin Orforglipron by Lilly is in the initial phase of testing, while the company’s CEO, David Ricks, has mentioned that they are progressing with a thorough phase 3 initiative focusing on diabetes and obesity.
I view these studies positively rather than as a risk for Roche. If amycretin or orforglipron receive approval from the U.S. Food and Drug Administration and are brought to market before CT-996, the success of these oral treatments could give Roche an idea of what to anticipate.
Furthermore, I am not very optimistic about other competitors. Pfizer has encountered several obstacles. Viking Therapeutics, along with its top weight loss drug candidate, danuglipron. Altimmune have demonstrated some encouraging results from their individual weight loss programs Both companies are in the development stage and do not have the necessary financial resources to compete effectively with Novo Nordisk or Eli Lilly.
Having three candidates undergoing clinical trials for both injectable and oral GLP-1 treatments, I believe Roche is well-positioned to become a strong rival to Novo Nordisk and Eli Lilly. In the future, Roche may secure a significant share of the weight loss market.
