The Pursuit of an Oral Obesity Agent: Why Pills Matter

The GLP-1 agonists semaglutide and tirzepatide are transforming the treatment of obesity. Drug developers, meanwhile, are looking for the next wave of weight loss drugs, in the hope of adding to the efficacy already on offer or improving tolerability.

An adjacent innovation push is also occurring in route of administration, to shift the market from self-injected products to pills. Novo Nordisk’s Wegovy (semaglutide) and Eli Lilly’s Zepbound (tirzepatide) are both supplied in autoinjectors – pen-like devices that allow patients to easily inject themselves, without having to see or handle needles.

Oral obesity drugs are attractive to drug developers for several reasons, the most obvious being convenience. It easy to understand why people might prefer pills to injections. A successful oral agent also holds the potential to expand the addressable market, persuading patients put off by injections to reach for a bottle of pills.

When it comes to long term weight maintenance, a pill is a more viable prospect than injections. Particularly if, as some suspect, many people will have to take these medications indefinitely to sustain a healthy weight.

The need to alleviate manufacturing burden is also driving the search for oral obesity drugs. Wegovy and Zepbound are large peptide products that are relatively complex to make and require large volumes of active ingredient. Novo and Lilly have not been able to produce enough to keep up with demand, which has capped sales growth. Manufacturing processes for small molecule drugs, on the other hand, are typically easier to scale up.

Non-peptide based oral projects against GLP-1, and other experimental oral obesity mechanisms in development, offer a potential workaround to these bottlenecks. Simpler process can also mean lower manufacturing costs, even before considering the elimination of the costs and complexity of making auto-injector devices.

Cutting manufacturing costs will be crucial if developers are to maintain profit margins in the coming years. This is because the price of obesity medicines will inevitably decline, amid intensifying competition and pressure from payers and politicians.

Making a difference

Oral obesity drugs are not expected to completely replace injectable products, but they could come to represent a large proportion of the market. How large depends on the outcome of ongoing clinical programmes.  

Phase 3 trials are the ultimate test of an agent’s clinical and commercial potential, and only one among this new wave of innovation has reached this stage. Lilly’s oral non-peptide GLP-1 agonist, orforglipron, is being tested in a broad pivotal programme in obesity and type 2 diabetes, with results likely to start emerging towards the end of 2025.

Lilly, and those coming behind, are hoping to show more than just a convenience advantage for these novel agents. Many are aiming at improving tolerability, particularly in terms of nausea and the other gastro-intestinal disturbances for which Wegovy and Zepbound are notorious. In terms of potency, few expect oral agents to be able to promote greater weight loss than the injected options, but they might be able to limit muscle loss, versus fat loss.

Showing differentiation on either safety or measures of weight loss will be crucial to persuade patients to switch from the highly effective injectable agents. Given the huge interest in obesity, these readouts are among the most keenly anticipated across the biopharma sector. Expect clinical wins to drive further dealmaking, as large developers seek a slice of this growing market.

Tema has previous predicted the obesity market could be as high as $500bn at peak, a forecast that a successful nonpeptide oral obesity drug would help unlock.

It should be remembered, however, that while Novo Nordisk and Lilly dominate the market for self-injected obesity drugs, the outcome of the race to develop the first truly effective oral obesity drug is not a foregone conclusion. Drug development is high risk, even for successful incumbents.

Tema’s actively managed GLP-1, Obesity & Cardiometabolic ETF (HRTS) navigates this complex space with a targeted approach to investment. With a portfolio designed around the most pressing and pioneering treatments available, and a focus beyond drug development to med tech and diagnostics, investors gain access to the most compelling segments within biopharma: those with the requisite tailwinds and growth prospects.

Oral obesity projects reaching readouts:

Eli Lilly's Orforglipron
(small molecule GLP-1 agonist)

Note: Novo Nordisk already has an oral version of semaglutide on the market in type 2 diabetes, branded Rybelsus, and it has successfully tested higher doses of this formulation in obesity. This, however, is a peptide-based product that carries the manufacturing burdens outlined earlier, and it is unclear whether the Danish firm will market Rybelsus for obesity. Global launches are dependent on “portfolio prioritizations and manufacturing capacity”, the company has said.

Some of the companies highlighted are holdings of the Tema GLP-1, Obesity and Cardiometabolic ETF. For a full list of up to date holdings, please visit www.temaetfs.com/hrts.