A collection of injector pens for the Wegovy weight reduction drug are shown on this photo illustration in Chicago, Illinois, March 31, 2023.
Jim Vondruska | Reuters
LONDON — Popular weight-loss drug Wegovy could be made available under more health insurance plans, after the outcomes of a late-stage trial pointed to the drug’s efficacy in reducing major cardiovascular events, analysts said on Wednesday.
The findings of Novo Nordisk‘s closely watched “SELECT” trial exceeded expectations on Tuesday, indicating that Wegovy lowered the danger of major cardiovascular events akin to heart attacks or strokes by 20%, compared with a placebo.
The Danish pharmaceutical company said it’ll now seek permission from U.S. and European regulators so as to add cardiovascular advantages to the drug label.
Peter Verdult, managing director and pharmaceuticals analyst at Citi, on Wednesday said that the trial conclusions could transform the medication from an apparent vanity drug to 1 that health insurers are willing to fund.
“Data like that is going to fuel, I believe, patients’ demand for the drug, physicians’ willingness to prescribe, and, most significantly, payers’ willingness to reimburse,” he told CNBC’s “Street Signs.”
Until now, some health insurers have been reluctant to cover the drug, given its high costs and a scarcity of knowledge around its underlying health advantages. Wegovy has a U.S. list price of $1,350, while it retails for around 170 and 300 euros ($190-$330) per 30 days within the parts of Europe where it is on the market.
But the outcomes of the most recent trial data could change that. The double-blind trial began almost five years ago and involved greater than 17,600 adults with established heart problems who were obese or suffered from obesity, but had no prior history of diabetes.
“The willingness to reimburse obesity drugs is improving — and that is happening even before yesterday’s SELECT,” Verdult said, citing certain reimbursements available within the U.S. and the U.K. “SELECT data isn’t going to harm that trajectory. It’ll, I believe, further open up access.”
Commenting on the outcomes on Tuesday, Novo Nordisk’s executive vp for development, Martin Holst Lange, said the drug “has the potential to vary how obesity is regarded and treated.”
U.S. pharmaceutical company Eli Lilly, which produces rival obesity drug Mounjaro, said in its earnings call of Tuesday that the trial results could provide assurance to some insurers, though it’s unlikely to guide to widespread coverage within the near term.
“Do I believe most payers will adopt [obesity drugs] overnight due to the SELECT trial? I do not think so,” Michael Mason, senior vp at Eli Lily and president of Lilly Diabetes, said. He noted that more “real-world evidence” is required to support payer decisions, adding that the corporate can also be investing in trials for its own weight-loss drug.
In accordance with the World Health Organization, global obesity rates have almost tripled over the past decade. It’s currently estimated that 1 billion people are clinically obese, of whom around 650 million are adults, 340 million are adolescents and 39 million are children. Cardiovascular diseases (CVDs), meanwhile, are the leading explanation for death globally, claiming an estimated 17.9 million lives every year.
Big market, little competition
The load-loss drug industry is estimated to be value as much as $200 billion inside the following decade, based on Barclays forecasts announced in April.
Novo Nordisk shares soared by 17% following the discharge of the trial results on Tuesday.
The corporate — whose share price has risen nearly 300% over the past five years — could now be heading in the right direction to dethrone luxury goods giant LVMH as Europe’s Most worthy firm by market capitalization.
“We expect gains within the shares to largely hold, as we view this as a giant step forward de-risking the obesity market globally over the long run,” Barclays said in a research note Tuesday.
It’s an actual tall order [for competitors] to are available in and knock these giants off their perch.
Peter Verdult
pharmaceuticals analyst at Citi
Verdult said Wednesday that the gains were prone to endure, given the present lack of competition available in the market. Shares of the stock were down 1.5% by 12:00 p.m. London time.
“Lilly and Novo are entrenched on the planet of diabetes commercially. And so they now, as we saw yesterday with SELECT, have outcomes data to further buttress this type of clinical profile,” he said.
“It’s an actual tall order [for competitors] to are available in and knock these giants off their perch,” he continued.
“Unless, heaven forbid, there’s some unexpected side effect that emerges, it’s extremely difficult to see Novo and Lily being pushed away.”
Supply constraints weigh
Some health concerns have indeed emerged across the so-called ‘miracle’ weight reduction drugs.
The European Markets Authority last month launched a review of a variety of drugs used to treat obesity and diabetes amid reports that some patients had experienced thoughts of suicide or self-harm. Novo Nordisk and Eli Lilly are also facing a lawsuit over complaints that their drugs caused stomach paralysis.
Verdult said such reports were to be expected given the quantity of media attention across the drugs. But he added that he believed the drugs’ current risk-benefit profile is “definitely positive moderately than negative.”
A more immediate hurdle for the corporate, nonetheless, could also be maintaining with surging demand.
Novo Nordisk and Eli Lily have already warned of supply constraints led by a spike in orders, including from non-obese people, and have urged physicians to limit prescriptions to patients with medical needs.
“The increased demand for this drug will exacerbate the shortages of Wegovy and Ozempic, which can last way into 2024,” Zhyar Said, healthcare analyst at pharmaceutical market research firm Citeline, told CNBC by email.
Eli Lilly said Tuesday in its second-quarter earnings announcement that it continues to expect “intermittent delays fulfilling orders of certain Mounjaro doses given significant demand.”
Novo Nordisk told CNBC that it could not comment on the shortages, because it stays in a quiet period ahead of its earnings release on Thursday.
The corporate said in May that it was “ramping up supply on daily basis” and employing recent contractors to extend its output.
Verdult noted it could be a while before the shortfall eases, “It is not going to be a fast fix.”
Disclosure: Barclays is an investor in Novo Nordisk.