Most analysts predict the market for latest weight reduction drugs similar to Wegovy and Mounjaro will probably be enormous, but estimates vary for its exact size depending on who you ask.
On Monday, Citi raised its estimate for incretin drug sales to $71 billion by 2035, up from its prior estimate of $55 billion. That viewpoint seems really conservative when placed side by side with predictions similar to Guggenheim’s. Last month, the firm made a case for there being a $150 billion to $200 billion opportunity for these drugs.
Guggenheim analyst Seamus Fernandez’s conviction comes from his belief that GLP-1-based incretins will change into probably the most pharmaceuticals ever by or before 2031. Not only do these drugs work well for managing insulin levels and helping patients shed weight, but studies are also underway to show their advantages for cardiovascular health, sleep apnea and chronic kidney disease, to name a couple of.
Fernandez expects $50 billion in GLP-1 sales will come from patients with diabetes as incretin medication becomes the usual of care for this condition. Patients with obesity will add one other $140 billion in sales, he said.
Citi’s forecast does reflect more modest assumptions. It’s assuming the variety of patients opting for the weekly injections will probably be below 10% of the non-Medicare obese patient population.
“Despite the plain demand and unmet medical need, we proceed to struggle with our inability to predict with any accuracy the long-term upside for incretins given the >42% prevalence of obesity,” analyst Andrew Baum wrote in a research note Monday.
The drugs are very pricey, with an inventory price of as much as $1,350 monthly for Wegovy. In the mean time, private insurance coverage is not a guarantee for those searching for weight reduction treatment, and the federal Medicare program doesn’t cover weight reduction drugs in any respect.
Still, the insurance situation is improving, as are supply bottlenecks.
Quite quite a few analysts expect these issues will probably be worked out over time and expect peak sales for these medications to reach around $100 billion by 2030. Goldman Sachs joined this camp last Monday with its latest forecast.
“In 2030, we estimate that ~15mn adults within the US will probably be treated with AOM [anti-obesity medication] for chronic weight management (excluding patients treated for type 2 diabetes), which represents ~13% penetration into the U.S. adult population,” analyst Chris Shibutani wrote in a research note.
Shibutani said about $52 billion will probably be captured by Eli Lilly, which sells Mounjaro, or tirzepatide. Eli Lilly expects the U.S. Food and Drug Administration to approve this drug to treat obesity by the top of this yr. Its pipeline also includes experimental, next-generation incretins orforglipron and retatrutide.
Eli Lilly shares have risen nearly 60% because the start of the yr.
Novo Nordisk, which is already approved to sell Wegovy (semaglutide) as a weight reduction treatment, also has additional anti-obesity drugs in its pipeline similar to CagriSema.
Many industry analysts anticipate that Novo Nordisk and Eli Lilly will reign over this market segment in a duopoly for quite some time. There are another drugmakers looking to enter this segment, but they continue to be significantly behind. Goldman’s model forecasts the 2 corporations can have an 80% share of the market in 2030.
Each stocks are up significantly on the back of optimism for the anti-obesity drug market. Eli Lilly shares have gained nearly 60%, while Novo Nordisk has climbed greater than 40%.
Don’t miss these CNBC PRO stories: