Investing in popular players in the area is not the only effective way.
The ecosystem of companies competing to develop weight loss treatments is growing every day, and there is more than one competitor ready to invest. While many investors look to small and risky biotechs to gain exposure, there are bigger and safer options, too.
Today, we will discuss two such methods. If the leader is in a position to lose weight at the moment, but with promising irons in the fire, they are positioned to shoot greatness down the line.
1. Amgen
Amgen (AMGN -0.03%) it is not often considered a weight loss drug, but it is competitive nonetheless. It has only one clearly developed weight loss program, called MariTide, which is in the second phase of clinical trials.
Results from the second phase test should be available by the end of 2024, but management is already planning to develop the competitor in the third phase. There are also plans to start a parallel phase 2 clinical trial for the treatment of type 2 diabetes before 2025.
If all these tests are successful and the drug is approved for sale, its market size may be similar to the blockbuster drugs that can treat obesity and type 2 diabetes developed by. Eli Lilly and Novo Nordisk. In other words, it can generate billions of revenue every quarter.
Another thing that can distinguish MariTide is its ability to give patients weight loss resistance so that they will not regain the lost pounds once they stop the treatment. In a previous study, patients who gave the highest tested dose of the agent were able to avoid regaining the weight they shed for about 150 days after the last dose, meaning they still weighed 11.2% less than when they started the trial.
In contrast, many patients end up regaining the weight they lost after they stop taking Lilly’s and Novo Nordisk’s weight loss drugs.
Time will tell if MariTide really does what the early data shows. But it’s just one program in Amgen’s larger pipeline, not to mention a portfolio of drugs on the market. Failure with this plan will not slow the company down much, but success can give it great growth. With a highly skewed risk and reward balance, it’s a good stock to buy right now.
2. AstraZeneca
AstraZeneca (AZN -0.22%) sees weight control drugs as a long-term demand, seeing this sector as one of the main drivers of its growth after 2030. It currently has one program in development for weight control, AZD6234, which is in phase I clinical trials. Those may end in the second half of 2025.
Importantly, the CEO of AstraZeneca, Pascal Soriot, considers the difference between weight management and weight loss to be important, especially for this program. While the drugs shown to treat obesity can be forgiven for their severe side effect profile, with the idea that patients will not want to take them at all, the opinion of the authorities is that there may be a lot of room in the market to find a mild drug. which is suitable for long-term use, and in conditions of health that is not too severe.
That view makes sense, especially considering that tolerance can be an issue with market-leading weight loss drugs. Therefore, if AstraZeneca’s plan doesn’t deliver impressive fat loss rates, investors shouldn’t sweat it; the CEO has a point, and it undoubtedly has to do with money.
The company also has another first-in-class project that is investigating metabolic-associated steatohepatitis (MASH) in patients who are overweight or obese, and have type 2 diabetes, which has phase one trials ending at the same time. The agent aims to use the GLP-1 receptor as its target, like drugs developed by Eli Lilly and Novo Nordisk. So, there is a great chance that by using the same method of action, it will also make you gain weight.
Once the initial work is done, AstraZeneca could then enter a phase 2 trial testing it for that purpose, assuming there is reason to believe it has a differentiating property.
Much like with Amgen, AstraZeneca’s cardiometabolic programs are just a sliver of its large research and development (R&D) pipeline. This makes its long journey into the market less risky than it might have been. At the same time, its desire to find competitors that offer limited results, rather than just high efficiency, is a very different approach to peers, and smart.
If you want to be patient while it develops – and it will be years – it is worth taking a chance on this stock.
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