© Reuters. FILE PHOTO: A selection of injection pens for the weight loss drug Wegovy are shown in this photo illustration in Chicago, Illinois, US, March 31, 2023. REUTERS/Jim Wondruska/Illustration/File Photo
by Maggie Vick
LONDON (Reuters) – Weight-loss drug Wegovi has helped Rebecca Vogt achieve a key goal: shedding the weight she hadn’t lost since giving birth. But after a particularly rough day in the bathroom suffering from vomiting and diarrhea, she called to quit.
“The nausea is absolutely horrible with this medication,” said Vogt, who struggled with the daily sickness for months.
After discontinuing the weekly shot, Vogt, a 48-year-old customer service representative in Buffalo, New York, said she regained 27 pounds (12.2 kilograms) she had lost.
Although Vogt’s take on the wildly popular drug Novo Nordisk (NYSE: NYSE), Vogt’s take is not unique. About 44% of patients taking the weekly injection experienced nausea and 30% experienced vomiting, according to the Prescribing Information – Guidance for Healthcare Professionals approved by the US health regulator, Food and Drug Administration (FDA).
“If there was a drug like Wegovy without the side effects of nausea, I would love to take it,” Vogt said.
Some US and European biotechnology companies hope to offer an alternative to Vogt and other people who suffer from side effects.
More than a dozen small, privately owned companies are developing drugs that hold the promise of weight loss like Wegovy without the downside of nausea, according to US investment bank Stifel, which published reports in March and July on the obesity market.
These experimental drugs work slightly or very differently from a class of drugs such as Wegovy, which work by mimicking the appetite-reducing hormone GLP-1. Because of this, they seem to avoid the side effect of nausea, according to interviews with CEOs from three companies.
Some of these companies have been working on their medicines for years. Executives of four of them told Reuters that the massive amount of interest in the obesity market due to Wigov’s success could be a game-changer for their drug development prospects.
They said the interest boom puts them in a better position to raise money from potential investors, as they seek a slice of the market valued at up to $100 billion by the end of the decade.
“The interest is very welcome,” said Jason Dallas, CEO of Rivus Pharmaceuticals in the US. His company, which was established in 2019, is developing a drug that disrupts mitochondria in the body, which affects energy consumption, so that a person who takes the drug will lose weight if he eats the same amount of food.
Investors are noticing the demand from people like Vogt.
“The next frontier for bariatric treatment will be achieving the efficacy of Wegovy or Mounjaro with fewer side effects and less loss of muscle mass,” said Noushin Irani, portfolio manager at Noushin Irani. Deutsche Bank (ETR:), the DWS asset management unit, which managed 841 billion euros ($914.34 billion) as of the end of March.
Monjaro is an Eli Lilly (NYSE) bariatric drug. The company said in April that it expects the drug to be approved as a treatment for obesity by the US Food and Drug Administration as early as late 2023. It leads to 22.5% weight loss, according to Lilly’s trial published last year.
Multiple approaches
Originally developed to treat type 2 diabetes, glucagon-like peptide-1 (GLP-1) receptor agonist drugs — such as Wegovy — mimic a gut hormone that suppresses appetite, promoting feelings of fullness. The effect achieves a much greater weight loss than its predecessors.
Wegovy’s first to market launch, launched in the US in June 2021, results in an average of 15% weight loss when combined with changes in diet and exercise.
Novo, Lilly and other major drug makers incl Pfizer (NYSE:) said they are working on a second generation of weight-loss drugs that improve Wegovy and Mounjaro by delivering pills rather than injections or by potentially increasing weight loss.
But these drugs are GLP-1s and still cause nausea, according to data the companies published separately in May from mid- and late-stage trials.
Some investors say biotech companies have a chance.
“There’s room for multiple avenues. Individuals and their doctors will see what’s best for them,” said Andrew Levine, managing director at RA Capital Management, a US healthcare-focused investment firm with $9.65 billion in management.
The group led a $132 million Series B funding round that closed last September for Rivus.
Its lead drug in development, HU6, was shown in an early eight-week “proof-of-concept” study to cause weight loss similar to GLP-1 drugs while preserving muscle mass and avoiding nausea, said Revos. Results of two phase 2 trials of HU6 are expected next year.
The Rivus CEO said that if the trial data is good enough, Rivus will consider an initial public offering (IPO) depending on market conditions.
Another biotechnology in the US that takes a different approach that has been shown in early trials to achieve weight loss without feeling nauseous is Glyscend Therapeutics, which was born out of a lab at Johns Hopkins University in Baltimore, Maryland.
In May, the company published preliminary data from a Phase IIa trial showing effective weight loss. The data also indicated that the drug was “well tolerated”. Mark Fineman, Glyscend’s chief scientific officer, said in an interview that the trials showed “mild nausea and short-lived gastrointestinal side effects” that went away within a day.
“We have a lot of options from a financing and partnership perspective, which didn’t exist even a few years ago,” CEO Ashish Nimgaonkar said in the same interview.
The company is well capitalised, but Nimgaonkar said he is optimistic that interest in the obesity market will help raise funds in the future as it boosts drug development.
Glyscend might consider an initial public offering if the market improves or partner with a large drug company for Phase III trials, he said.
Antag Therapeutics in Denmark, an early-stage biotechnology company, told Reuters that the ballooning obesity market has improved its fundraising prospects.
Antag CEO Alexander Sparre-Ulrich told Reuters that the company hopes to close a €30 million Series A funding round by the end of 2023 to start the first phase of a clinical study.
Another European biotechnology company, Swiss-based Aphaia Pharma, in May launched its Phase 2 clinical trial of a daily glucose formula, which is taken mixed with water. Phase 1 data showed that it suppresses appetite by restoring the normal secretion of GLP-1 and other hormones, without causing nausea.
The drug’s effect on weight loss is being tested in a phase II study. Results expected next year.
“It is quite possible that in 5-10 years we will see more than a hundred biotechnology companies operating in this area,” said Tim Obler, investment banker at Stifel. Opler said Stifel is not currently an investor in any of the biotech companies mentioned in their reports.
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