Novo Nordisk’s CagriSema and the Competitive Dynamics in the Obesity Drug Market

[Nov 9th, 2024] - Obesity Week 2024 took place last week in San Antonio and, perhaps not unsurprisingly, one of the main topics of discussion was semaglutide, the active ingredient in Wegovy, Novo Nordisk’s flagship obesity drug. Of particular interest was the SELECT study, a randomized, controlled trial which assessed cardiovascular outcomes in patients taking semaglutide vs placebo. For Novo (and of course for obesity patients), new indications for Wegovy that highlight semaglutide’s broader health benefits are great news, but, for the Danish pharmaceutical giant, is this enough amidst an increasingly competitive landscape where rivals such as Eli Lilly are threatening to outperform Wegovy’s weight loss capability?

Novo Nordisk’s semaglutide-based drugs, marketed under the brand names Ozempic and Wegovy, have fundamentally transformed the landscape for obesity and diabetes treatment, bringing weight loss capabilities that rival surgical interventions to patients within a simple self-administered dosing pen. Semaglutide, a GLP-1 agonist, has gained substantial market traction and is poised to become the top-selling pharmaceutical product globally in 2024, in the process making Novo Nordisk Europe’s biggest company by market cap. But the competitive environment in the obesity therapeutics market is intensifying rapidly. Novo faces increasing challenges from Eli Lilly’s GLP-1/GIP dual agonist, Zepbound (Mounjaro), and emerging generics as patents near expiration in major markets like the U.S., Europe, and China. In response, Novo is leveraging a new combination therapy, CagriSema, which integrates semaglutide with an amylin analog, cagrilintide. CagriSema could represent the next frontier in multi-receptor obesity treatment, potentially providing superior weight-loss outcomes while maintaining manageable side effects. Here we explore the competitive landscape, the scientific rationale behind CagriSema, its market potential, and the substantial challenges that lie ahead for Novo in the obesity therapeutics space.

Competitive Landscape: The GLP-1 Agonist Market and New Entrants

The global obesity market is projected to reach $130 billion by 2030, driven by the success of GLP-1 agonists such as Wegovy and the increasing prevalence of obesity and related metabolic diseases. Despite Wegovy’s significant impact, Eli Lilly’s Zepbound has entered the market with compelling efficacy data, showing up to 21% weight reduction in clinical trials compared to Wegovy’s 15% weight reduction. Eli Lilly’s head-to-head trial between Zepbound and Wegovy, expected by year-end, may further highlight the advantages of its dual-action mechanism, positioning it as a formidable competitor. Additionally, Eli Lilly’s triple-agonist compound, retatrutide, targets GLP-1, GIP, and glucagon receptors and has demonstrated up to 24% weight loss in clinical trials, setting a new benchmark in obesity therapy.

In this context, Novo’s success with CagriSema hinges on its ability to deliver superior or at least comparable outcomes. CagriSema’s 25% weight-loss target would position it competitively above existing treatments and could help Novo retain market leadership. However, should CagriSema fall short or produce substantial side effects, Novo risks losing its competitive edge to Zepbound and potentially other emerging options, including oral therapies from both Novo and Eli Lilly.

The Scientific Foundation of CagriSema: Combining GLP-1 and Amylin

CagriSema combines GLP-1 and amylin agonists to harness the complementary mechanisms of these hormones in promoting satiety and weight loss. GLP-1 agonists work by slowing gastric emptying and enhancing insulin secretion, thereby reducing food intake and aiding glycemic control. Amylin, on the other hand, modulates satiety through a distinct neural pathway. The rationale is that amylin’s unique mechanism may reduce the “yo-yo” weight-regain effect commonly seen with obesity drugs, potentially resulting in more sustained weight loss.

The inclusion of cagrilintide, an amylin analog, is a strategic decision that could address some limitations of GLP-1 monotherapy. Amylin has shown the potential to extend satiety effects without the gastrointestinal side effects typically associated with GLP-1 therapies, such as nausea and vomiting. The dual action of GLP-1 and amylin in CagriSema could thus offer enhanced weight loss with a more tolerable side-effect profile. This novel approach has attracted considerable interest from competitors, with companies like Zealand Pharma and Eli Lilly developing their own amylin-based candidates.

The question that remains, however, is whether CagriSema can deliver on its promise. While preclinical and initial clinical data appear promising, the December readout from CagriSema’s large-scale clinical trial will be crucial. Positive results could solidify amylin’s role as a target in anti-obesity pharmacotherapy and position CagriSema as a leading therapy in the space. However, any failure to meet its weight-loss targets or adverse side-effect revelations could significantly impact Novo’s market position.

Addressing the Manufacturing Complexity and Supply Constraints

Novo Nordisk has struggled to keep up with global demand for Wegovy and Ozempic, largely due to the supply challenges inherent in biologic production. For CagriSema, the manufacturing demands will be even greater. Unlike single-agent therapies, CagriSema’s formulation requires a dual-chamber syringe to keep the GLP-1 and amylin analogs separate until the point of administration. This dual-chamber technology is complex and has not been commercialized at scale, which may limit Novo’s ability to rapidly meet potential demand.

While Novo has invested in expanding its manufacturing facilities to address these issues, the complexity of CagriSema production may slow its rollout and leave Novo vulnerable to supply disruptions, especially as rivals with simpler formulations enter the market. The potential future development of an integrated single-syringe version of CagriSema could alleviate some of these production hurdles. However, this pathway presents additional technical and regulatory challenges and may not be viable in the near term.

Shifting Market Dynamics and Emerging Oral Therapeutics

While the current market is dominated by injectable biologics, the future of obesity treatment could shift toward oral therapies. Oral delivery options could improve patient adherence and accessibility, particularly for individuals who may be averse to injections. Novo Nordisk and Eli Lilly have both explored oral formulations of GLP-1 and other analogs. However, Novo faces setbacks in this area, as one of its early-stage oral candidates did not meet analysts’ expectations. Eli Lilly’s oral compounds, on the other hand, are showing promise and could soon become a competitive threat.

If CagriSema proves successful, Novo could have a temporary advantage, but the long-term market focus may shift toward more convenient oral formulations. For Novo to maintain its market position, it must ensure that its research pipeline includes viable oral candidates and that it can navigate the challenges of manufacturing potent, stable oral biologics—a challenging feat but one that could ultimately secure Novo’s market presence against injectable and generic competitors alike.

Strategic Imperatives for Novo Nordisk

Novo Nordisk’s journey from a GLP-1 pioneer to a potential leader in multi-receptor obesity therapeutics reflects the company’s innovative and adaptable approach. CagriSema embodies Novo’s next step in advancing obesity pharmacotherapy, combining GLP-1 and amylin’s synergistic effects to potentially deliver superior weight loss outcomes with fewer side effects. Nevertheless, this ambitious project faces formidable challenges, from clinical validation and patent protection to complex manufacturing and competitive pressures.

The global obesity drug market is intensifying, with competitors like Eli Lilly pushing the boundaries of multi-receptor agonist therapy, both in injectables and oral formulations. In this high-stakes environment, Novo must execute a twofold strategy: first, deliver CagriSema successfully to market while maintaining its efficacy and safety profile; second, continue to invest in next-generation therapies, particularly in oral formulations, to capture evolving patient preferences.

Ultimately, Novo’s future in the obesity market depends on its ability to overcome the immediate challenges and prepare for the shifting competitive dynamics ahead. If Novo succeeds in its ambitious goals for CagriSema and capitalizes on its R&D investments in emerging therapies, it stands a strong chance of preserving its leadership in the multi-billion-dollar obesity drug market.