Please find attached a report on the obesity drug market. This report contextualizes clinical findings that were reported at the American Diabetes Association conference held in Chicago in late June.
Quick Takeaways
- The ADA conference brought a tour de force of data from Eli Lilly.
- Lilly’s looks to us like it is starting to take a dominant position in the obesity field.
- As a result, the job for Lilly’s competition in obesity looks a lot tougher today than it did a year ago.
- Nonetheless, there are a number of players that look sufficiently well positioned to take meaningful share from Eli Lilly in the next five years.
- The self-pay market for obesity markets continues to explode, particularly outside the United States.
- Our estimate of the total market size for obesity drugs has grown to over $400 billion because of the increasing ex-US demand for obesity drugs.
- There are substantial early pipeline opportunities in the obesity field which have the promise to remake the field in the 2030s.
Report Summary
Here is a summary of the main points in this report.
The ADA conference was a tour de force of data from Eli Lilly. Lilly showed that bimagrumab, its Activin A Inhibitor antibody, could be delivered subcutaneously with good safety and it helped patients keep on much of their muscle when taking tirzepatide. Further, Lilly shared Phase 3 data on orforglipron (“orfo”), its oral GLP-1 drug. This is the first of seven planned Phase 3 studies and, importantly, showed that orfo achieved good weight loss in Type 2 diabetes while generating quite good tolerability. To us, it looks like orfo will be the first truly massive oral drug for obesity. As a small molecule, the types of supply issues that have dogged the GLP-1 class to date should be a non-issue. Finally, Lilly shared proof of concept data on eloralintide, its Amylin agonist for the first time. These data were quite good with efficacy and side effects that, if anything, look better than all other drugs that have gotten to Phase 2 so far (such as Zealand’s dapiglutide.
Other key readouts came from Amgen and Novo Nordisk. Novo Nordisk’s amycretin, a GLP-1/amylin dual agonist, posted eye-catching results: the 60 mg dose yielded 23.2% placebo-adjusted weight loss at 36 weeks, a new high-water mark. However, tolerability concerns were evident—35% of subjects discontinued at this dose, compared with 0% on placebo. Investigators concluded that the 20 mg dose, associated with 20% weight loss and fewer dropouts, is the more viable candidate for Phase 2 and Phase 3 trials. Amgen reported data on MariTide in a Phase 2 study. MariTide’s 52-week placebo-adjusted weight loss with 12-week dose escalation of 17.3% could be commercially viable even if retatrutide is approved. The reason is that patients only need to dose this drug once monthly. However, discontinuation rates in the teens with dose escalation have concerned some observers who note that this drug is given for a month so a patient cannot easily deescalate if they are having tolerability issues.
Great progress in the Amylin field in recent months. In addition to Lilly’s eloralintide data we would highlight the excellent weight reduction with weekly dosing seen with Gubra/AbbVie’s GUBamy. Metsera’s MET-233i, a long-acting amylin analogue, has shown an 8% placebo-adjusted weight loss after just four weeks. Further, both Structure Therapeutics and Verdiva have made substantial progress developing oral amylin analogues – which have obvious potential to be combined with oral GLP-1 agonists. A particularly important aspect of the amylin analogue drug class is that they can preserve muscle. Substantial research supports this perspective.
The ADA conference had a particularly rich set of findings for the use of incretins for the treatment of obese patients with Type 2 diabetes. Tirzepatide is the current market leader for improvement in HbA1c in patients with Type 2 diabetes. Brightgene and Kailera have developed molecules with the same MOA and have shown very similar improvements in HbA1c. Amgen’s MariTide comes close to matching these results with a once monthly antibody approach. One thing that is interesting here is that retatrutide does not seem to add value in HbA1c control to tirzepatide. The window is obviously open for competition in this area – particularly for companies that wish to take a precision approach by adding on a molecule such as Biomea’s icovamenib or Hua Medicine’s dorzagliatin to a GLP-1/GIP agonist.
Lilly looks to us like it is starting to take the obesity field. It is starting to look like it’s going to be very difficult to compete against Eli Lilly in the future obesity drug market. This is because they are generating what look like both first-in-class offerings in the dual and triple incretin categories, but those molecules also look like they have a good chance to be best-in-class.
The job for Lilly’s competition in obesity looks a lot tougher today than it did a year ago. By the time semaglutide goes generic (less than five years from now) Lilly appears likely to have a great triple incretin in the market, an excellent oral option, a muscle enhancing drug and a very competitive amylin analogue.
There is still room for competition. Competitors, including several players with highly competitive Chinese sourced molecules may still be able to thrive via alternative commercial models or clinical differentiation. We would particularly note Kailera’s KAI-9531. This agent is advanced, and its data looks quite strong. KAI-9531 seems to us best positioned competitor vs. Lilly. Viking has a highly promising drug in VK7395 and is now starting its Phase 3 program. It is now on track for approval at end-of-decade. Upcoming clinical data will define its potential to compete against Lilly. Metsera has a differentiated offering that could carve out market share for combo of biased LA GLP-1 and amylins in a Lilly centric world. Like Kailera the data for Novo Nordisk’s SC amycretin look good. The question is how well this drug does in larger multi-center Phase 3 trials which are ahead of us. Novo still could pull it out here and obviously has a deep portfolio of early obesity drugs. Roche has a very good bet with a biased GLP-1/GIP dual agonist, CT-388, that could outperform retatrutide in Phase 3 studies. Roche intends to combine this drug with Zealand's amylin agonist going for deep weight loss but Phase 3 studies for this combo are still far away. AstraZeneca is betting big on its oral GLP-1 licensed from Eccogene. Its long-acting amylin also has promise but could be interesting in an increasingly competitive marketplace. On track for an FDA approval with the GLP-1 in 2029.
The self-pay market for obesity markets continues to explode. Unfortunately, the U.S. government and commercial payors have been slow to reimburse use of obesity drugs. Consumers have responded by taking matters into their own hands. We estimate that more than $4 billion in volume is now going through the DTC market and that this segment continues to grow. Despite efforts to extinguish it, the compounded segment of the DTC market continues to flourish.
The self-pay market is growing quickly outside the U.S. India: Tirzepatide was introduced in India in March 2025 and has been wildly popular at a price of $200 to $300 a month depending on the dosage used. Sales are likely to explode going forward. Based on our calculations there are 283 million obese persons with sufficient means to pay for a GLP-1 at $3k a year in India, Brazil, China, Russia, the UK, the Gulf countries (e.g., Bahrain) and Mexico. It would be reasonable to estimate that the actual ex-US market is more like 500 million people. The TAM here is $1.5 trillion and we believe 10% market penetration is reasonable, implying this market gets to something like $150 billion.
One aspect of the self-pay market that has yet to receive much attention is the market for muscle-preserving drugs. There are at least three use cases for a good SubQ or oral muscle enhancing drug: (1) avoiding the muscle loss side effect of GLP-1’s, (2) preventing sarcopenia in the elderly and (3) deliver aesthetic benefit. We believe that many men would pay up for muscle enhancing drugs from a pure aesthetic perspective. In the same sense that GLP-1’s generated high demand from consumers in the DTC market, we would expect $100bn+ in revenue in the aesthetic segment. Once a patient has conquered girth, muscling up tends to be the next priority. If you will, the next phase is going away from “Ozempic face” to having a truly great physique. Obviously, these drugs will need to be shown to be safe to justify this type of aesthetic use. We didn’t see full bimagrumab safety tables at ADA and await a scientific publication to see readout. A key unanswered question is what the FDA will want to see for approving a muscle drug. For example, will functional outcomes be needed?
There is still plenty of room for new entrants in the field. We review the many players chasing the obesity market through clinical development and highlight quite a few promising pipeline plays including Novo Nordisk’s amycretin, Roche’s CT-388, Kailera’s KAI/HRS-9531.
There are also substantial early pipeline opportunities in the field. In the longer run we are optimistic about other triple and quad incretins including Novo’s triple incretin, Minwe’s triple, Pep2Tango’s preclinical quad incretin and Protagonist’s recently announced oral triple incretin drug PN-477.
GPR75 drugs look promising. GPR75 is an orphan G-protein–coupled receptor (GPCR) that, when inactivated, appears to protect against diet-induced obesity in mice. Mice homozygous for GPR75 knockout do not gain weight even on a high-fat diet. The receptor is linked to neuronal cilia in the hypothalamus that regulates appetite and energy balance, suggesting a powerful central mechanism distinct from incretin pathways. The GPR75 drug pipeline is led by Regeneron, Orion Biotechnology, and Confo Therapeutics, all developing antagonists targeting this genetically validated receptor implicated in obesity. Orion Biotechnology appears to be furthest advanced, with preclinical candidates demonstrating weight loss comparable to GLP-1 agonists and the ability to combine additively with daily GLP-1 therapy, while preserving lean mass and avoiding significant appetite suppression. Regeneron, which originally identified protective GPR75 mutations, is progressing multiple preclinical programs including small molecules and possibly antibodies, positioning itself as a leader in translating genetic discoveries into therapies. Confo Therapeutics is also pursuing GPR75 modulators, though details remain limited. Several additional companies are reportedly working on stealth programs aimed at creating oral small-molecule inhibitors, reflecting broad industry interest in this novel mechanism. Overall, the field is moving quickly toward human trials, with Orion expected to enter Phase 1 by 2026. Regeneron has not updated its status lately so it’s hard to position it relative to other players.
Lumen Bio’s oral biologic drug looks quite interesting. Lumen Bio is pursuing a novel oral approach to obesity treatment that leverages programmable cyanobacteria—specifically spirulina. For their lead candidate, LMN-0801, a monoclonal therapeutic protein is encoded within edible blue-green algae that can be grown, harvested, and delivered either as an Rx drug or, possibly, as a supplement. Spirulina itself is already approved as a food, providing it with potential regulatory advantages and an established safety profile. What differentiates Lumen’s product is that it is engineered to produce a well-known yet undisclosed gut-active therapeutic protein. Importantly, this protein is not one of the incretins currently targeted by major pharma companies. In animal studies, the spirulina-based product demonstrated promising weight loss comparable to injectable GLP-1 drugs without lean mass loss, suggesting that orally delivered proteins targeting gut receptors may be a viable alternative to more expensive biologics. Lumen’s program stands out because of its incredibly low cost of goods—estimated at pennies per dose—and simplified manufacturing, which could enable large-scale distribution and potentially support a direct-to-consumer model. The company is conducting a Phase 2 trial with a data readout by yearend. Because of its low cost and delivery method, we think Lumen’s drug candidate has the promise to radically expand obesity treatment access, especially in markets where the cost and logistics of injectables have been prohibitive. Without doubt, Lumen Bio represents one of the most ambitious and unconventional attempts to transform obesity pharmacotherapy through synthetic biology and low-cost oral delivery.
We are also excited by the new wave of RNA interference (RNAi) and nucleic acid therapies that silence genes which influence fat accumulation and metabolism. Arrowhead Pharmaceuticals leads with ARO-INHBE, an siRNA targeting INHBE, the gene encoding Activin E. Preclinical primate studies showed up to ~79% sustained protein reduction, with effects lasting at least 90 days, supporting quarterly dosing. Arrowhead has begun a Phase 1/2a study testing ARO-INHBE alone and in combination with tirzepatide to see if Activin E knockdown can amplify fat loss while sparing lean mass. The company is also advancing ARO-ALK7, which targets ALK7, Activin E’s receptor, into early human studies. Alnylam Pharmaceuticals is developing ALN-2232, another siRNA aimed at ACVR1C (ALK7), and a separate INHBE candidate, both in preclinical and early clinical stages with first-in-human trials expected in late 2025. Meanwhile, Wave Life Sciences has introduced WVE-007, a GalNAc-siRNA targeting INHBE that, in animal models, combined with semaglutide to more than double weight loss compared to semaglutide alone—an encouraging sign for future combination regimens.
Beyond siRNA, interest is rising in microRNA and long non-coding RNA (lncRNA) therapies. Resalis Therapeutics has begun a Phase 1 trial of RES-010, a lncRNA therapy designed to improve metabolic health in overweight adults, with first data expected in 2026. Together, these programs highlight how nucleic acid therapeutics could become powerful, durable complements—or alternatives—to incretin-based drugs in the next generation of obesity treatment.
We remain highly interested in CB1 inhibitors. We saw Novo talk up the potential of its CB1 drug last year, only to disappoint when it released findings (some unspecified CNS issues). Skye’s CB1 antibody has high potential as it does not cross the blood-brain barrier and is set to report clinical data later this year. This is an orthogonal MOA that could be additive to the current armamentarium. We will also see data from a small molecule drug candidate from Corbus later this year. Given the high weight loss seen with Novo’s monlunabant, our own view is that the CB1 class still has reasonable potential to be successful as an add-on therapy in today’s incretin-heavy landscape.
GIP blockers are a class we have followed with keen interest, having previously been enthusiastic about their potential in obesity treatment. This optimism fueled our high expectations for Amgen’s MariTide, which we initially saw as a potent dual-action therapy that could outperform tirzepatide, given the rationale that GIP is meal-induced and drives insulin secretion, ultimately promoting fat storage. The concept was that GIP antagonists would outperform GIP agonists and give patients the flexibility to combine GIP inhibition with GLP-1 or amylin agonists—or to avoid GLP-1’s notorious nausea entirely. With about 30% of GLP-1 users stopping treatment because of tolerability, a monotherapy GIP antagonist seemed poised for major market impact. However, so far, the data have not been promising; MariTide has not beaten tirzepatide thus far, suggesting that GIP agonism may be a more effective approach.
That said, the debate is far from settled. Some evidence indicates that GIPR agonists might act as functional antagonists, a theory supported by tirzepatide’s greater insulin suppression compared to GLP-1 alone. Last month’s issue of Diabetes highlighted this controversy, with Rosenkilde et al. presenting evidence favoring GIP antagonism, while Samms and Sloop argued for GIPR agonism to reduce nausea and suppress appetite. Upcoming trials should shed more light: Pfizer’s GIPR antagonist PF-07976016 is in Phase 2a monotherapy testing, Helicore is advancing a GIP ligand antibody (with bispecifics targeting incretins like amylin), and Antag has started Phase 1 studies of its potent peptide GIPR antagonist AT-7687. These results promise to clarify whether GIP antagonism is a breakthrough or not for patients.
Best,
Tim Opler
Managing Director
Stifel Investment Banking
Direct Phone: +1 212-257-5802
oplert@stifel.com
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