Obesity Drug Review

Market Update – July 1, 2023

Source: Getty Images.

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 Executive Summary

Table of Contents The recent American Diabetes Association conference was one of the
most exciting scientific meetings that we can remember. This report
summarizes studies released at ADA on novel obesity drugs and compares
results from novel agents highlighted at the conference to other agents in
Section Page development. We also discuss the evolution of the obesity drug market
and the growing importance of the image conscious consumer.
Lilly’s Retatrutide Stuns the Market 4
Details on Amgen’s AMG133 23 Retatrutide Data at ADA
Unmet Needs in the Obesity Landscape 36
Retatrutide (RETA) from Lilly, a triple incretin drug, reported stunning 48-
Obesity Drug Pipeline 63 week weight loss data with 22% placebo-adjusted weight loss. On
average, this corresponded to 58 pounds for study participants. There are
The Consumerization of Obesity Treatments 67
some side effects that will need to be tracked as this agent goes through
How Big is the Obesity Market? 76 Phase 3 trials.

Remarkably, Lilly’s RETA, its tirzepatide molecule and newly introduced

orforglipron jointly position Lilly as the market leader in weight loss
efficacy at 24 weeks.

The story behind Lilly’s success involves persistence, focus and speed. A
backgrounder on Lilly’s efforts in the Wall Street Journal was illuminating.

When one starts to look at agents that are earlier in development it is far
from clear that either tirzepatide or retatrutide will emerge as the long-
term winners in the market.
555 Madison Ave, Suite 1201, New York NY 10022, +1-(212) 257-5801
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Executive Summary
(Continued) There are a number of exciting agents in development. Both Structure
Therapeutics and Pfizer are developing oral agents to compete with
Novo’s oral semaglutide and Lilly’s orforglipron. Other promising oral
There are four earlier stage agents with strong data from 4- approaches in development include AZ/Regeneron’s GPR75 modulator,
week and 12-week obesity studies that have caught our eye: Inversago’s CB1r agonist, Glaceum’s mitochondrial drug and Kallyope’s
Amgen’s AMG133, Viking’s VK2734, Carmot’s CT-268 and Sun’s gut-brain axis drugs. A number of companies are working on
GL0034. All are incretin modulators, and each has potential to approaches that would selectively eliminate fat mass while preserving
be outcompete retatrutide, tirzepatide and semaglutide. muscle. Of particular interest are Rivus and Versanis, which is using an
antibody to attack a target selectively expressed on adipocytes.
AMG133
The Changing Market and Opportunity
Amgen’s is a GLP-1 agonist fused to a GIPr antagonist. The
weight loss seen with this agent corresponds to going from 250 Interest in the modern GLP-1 agonists like Ozempic® is off the charts. A
pounds to 215 pounds in three months. recent STAT / Harris Poll survey indicated that 16% of Americans would
be willing to pay more than $500 a month out of pocket for these
AMG133 is the first pharmacologic agent to beat bariatric obesity drugs. One of the remarkable differences between today’s
surgery for weight loss. obesity market and that of the past is how important the consumer’s
direct participation has become. Because of shortages with semaglutide,
Unmet Needs in the Market and Emerging Pipeline consumers have increasingly gone online to buy drugs directly.

Despite recent successes, the obesity market remains wide open The market opportunity is obviously a large one. After conducting some
to competition. New agents are needed by patients that can analysis, we conclude that current estimates of ultimate market size ($30
deliver one or more of the following traits: (1) avoidance of billion to $100 billion peak sales) appear conservative. There is both a
nausea, (2) avoidance of the “rebound effect”, (3) reduced cost, gigantic private pay market opportunity and a reimbursed market
(4) oral delivery, (5) avoidance of muscle loss, (6) less frequent opportunity – unlike anything we have seen before in the pharma sector.
dosing and (7) delivery via direct-to-consumer models. The latter will depend on upcoming readouts from outcomes studies.

3
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

Lilly’s Retatrutide Stuns the Market Last Week

Source: Getty Images.

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Lilly’s Retatrutide Associated with 24.2% Weight Loss in
Eleven Months (58 Pounds, on Average)
INDIANAPOLIS, June 26, 2023 /PRNewswire/ -- Eli Lilly and Company (NYSE: LLY) announced today new phase 2 data from
retatrutide, Lilly's investigational molecule being studied for the treatment of obesity. At 24 weeks, retatrutide (1 mg, 4 mg, 8 mg or 12
mg) met the primary endpoint for the efficacy estimand in participants living with obesity or overweighti without diabetes,
demonstrating a mean weight reduction up to 17.5% (41.2 lb. or 18.7 kg)ii. In a secondary endpoint, retatrutide demonstrated a mean
weight reduction up to 24.2% (57.8 lb. or 26.2 kg)ii at the end of the 48-week treatment duration. The results were presented in a
symposium at the American Diabetes Association's® 83rd Scientific Sessions and were simultaneously published in The New England
Journal of Medicine (NEJM).

The safety profile of retatrutide was similar to other incretin-based therapies. Gastrointestinal side effects were the most commonly
reported adverse events, were generally mild-to-moderate in severity, and usually occurred during the dose escalation period.

"Obesity is a treatable chronic disease with a complex underlying biology. We are now in the midst of a rapidly expanding therapeutic
landscape of potential highly effective treatment options for individuals with obesity," said Ania Jastreboff, MD, Ph.D., Associate Professor
of Medicine & Pediatrics, Endocrinology & Metabolism, at Yale School of Medicine; Director, Yale Obesity Research Center (Y-Weight);
and co-Director of the Yale Center for Weight Management. "Participants treated with the highest dose of retatrutide achieved a mean
weight reduction of 24.2%; this translates to an average absolute weight reduction of about 58 pounds over 11 months of the
study. Given that participants had not yet reached a weight plateau at the time the study ended, it appears that full weight reduction
efficacy was not yet attained. Longer duration phase 3 trials will enable comprehensive evaluation of efficacy and tolerability of this
potential pharmacotherapeutic for the treatment of obesity."

Source: https://www.prnewswire.com/news-releases/lillys-phase-2-retatrutide-results-published-in-the-new-england-journal-of-medicine-show-the-
investigational-molecule-achieved-up-to-17-5-mean-weight-reduction-at-24-weeks-in-adults-with-obesity-and-overweight-301863690.html 5
Audience at ADA Stunned by Retatrutide Data

Lilly’s retatrutide
presentation at ADA
was not an everyday
industry event.

Source: https://twitter.com/ScripMandy
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 The New Weight Loss “Godzilla” Has Arrived
Better than Mounjaro? New Drug Sees Highest Weight Loss
Results Seen in Studies Yet, Diatribe, June 27, 2023

“This is really a ‘wow’ kind of a reaction because we

haven't reached this degree of weight loss in people
with type 2 diabetes before,” said Julio Rosenstock
[Professor of Medicine at UT Southwestern].

Right now, tirzepatide is the gold standard for weight

loss. With these promising new findings, retatrutide
could present a whole new generation of treatments for
weight loss management.

“We know that tirzepatide is the King Kong of the

GLP-1s,” said Rosenstock. “And when I look at
retatrutide, I think that there is no question that
Godzilla is smiling."
Godzilla Has Arrived

Source: https://diatribe.org/better-mounjaro-new-drug-sees-highest-weight-loss-results-seen-studies-yet. Photo sourced from Getty Images.

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Retatrutide Sets the New Benchmark for 48 Week
Weight Loss
Unlike some of our previous analyses this chart shows placebo-adjusted weight loss at the same timepoint in order to enhance
comparability. The results speak for themselves: Lilly’s retatrutide has edged out tirzepatide – another Lilly product. It’s important, of
course, to note that none of these agents were compared head-to-head and, indeed, study designs can influence outcomes.

Placebo Adjusted Weight Loss Among Obese Persons by Therapeutic Approach

(48 Weeks, Highest Dose Used)

-1.0%
-4.0%
-5.4%
-6.7%

-10.8%
-12.3% -12.1%

-19.5%
-22.1%
Retatrutide (Lilly)

Tirzepatide (Lilly)

Semaglutide (Novo)

Survodutide (BI/Zeal)

Qsymia (Vivus)

Nat / Buprop (Currax)

Liraglutide (Novo)

Orlistat (GSK)

Diet and Exercise

Source: Stifel analysis of study results for various agents. 8
Retatrutide Weight Loss at 12 Months is Competitive
With Bariatric Surgery
A pharma industry holy grail has been to match the effect of
bariatric surgery with a drug.

Roux-en-Y Gastric Bypass and Sleeve Gastrectomy surgery are

associated with 14% weight loss at 90 days, with 28% weigh loss
at one year and, ultimately, get to 30% weight loss at year 2.

Retatrutide’s 22% weight loss result is within shouting distance

of gastric surgery.

There are major disadvantages of bariatric surgery including

potential nutritional deficiencies. Chronic complications include
but are not limited to strictures, bone loss, internal hernias,
fistulae, gallstones and dumping syndrome.

There is one major benefit of gastric surgery versus obesity

drugs: the weight loss is permanent. While there is some
rebound gain it is quite limited versus what’s seen with GLP-1s
to date

Source: Cadart O, Degrandi O, Barnetche T, Mehsen-Cetre N, Monsaingeon-Henry M, Pupier E, Bosc L, Collet D, Gronnier C, Tremollieres F, Gatta-Cherifi B. Long-Term
Effects of Roux-en-Y Gastric Bypass and Sleeve Gastrectomy on Bone Mineral Density: a 4-Year Longitudinal Study. Obes Surg. 2020 Sep;30(9):3317-3325.
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NAFLD Sub Study with Retatrutide Also Impressive
ADA Press Release, June 26, 2023

The phase 2 obesity study included a NAFLD substudy, which sought to evaluate how the use of retatrutide in
patients with obesity and NAFLD would affect the amount of fat in the liver. The substudy evaluated 98 patients
with obesity and NAFLD who underwent magnetic resonance imaging (MRI) of their livers and had biomarkers of
liver injury and fibrosis (scarring) measured in their blood.

Findings showed that in those with NAFLD, the amount of fat in the liver normalized in 9 out of 10 patients
after 48 weeks treatment with the two highest doses of retatrutide. These data indicate that retatrutide has
the potential to resolve NAFLD.

“This study raises the possibility that in the early stages of liver disease, it is possible to ‘de-fat’ the liver, which
could in turn help to reduce the long-term cardiac, metabolic, renal, and liver-related harm from obesity. We are
encouraged by these results and how they can potentially help tackle a disease that is currently without any
approved therapies,” said Arun J. Sanyal, MD, Director of the Stravitz Sanyal Institute for Liver Disease and
Metabolic Health, Professor of Medicine, Physiology, and Molecular Pathology and Interim-Chair of the
Gastroenterology, Hepatology, and Nutrition Division at Virginia Commonwealth University.

Source: https://diabetes.org/newsroom/press-releases/2023/american-diabetes-association-highlights-novel-agent-retatrutide-results-substantial-weight-reduction-people-
with-obesity-type-2-diabetes-during-late-breaking-symposium
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 Impressive Reductions in Liver Fat with Retatrutide

These findings mirror a well-known phenomenon – that

NAFLD largely resolves with meaningful weight loss. It
remains to be seen how competitive weight loss drugs will be
to FGF21 analogues and other competitors in the NASH field.
Source: ADA slides from Dr. Sanyal 11
 Some Safety Items to Track with Retatrutide

Will be important to
track arrhythmias in
subsequent
development.

Will be important to
track severe GI events
in subsequent
development.

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Lilly Sweeps All Three Top Spots in 24-Week Weight
Loss Rankings
To be able to drop 16% of body weight with retatrutide in less than a half year is stunning and important
therapeutic option for persons who are overweight. It’s interesting to note that the three agents with the best
weight loss at this time period all come from Eli Lilly. We are reminded of Jamaica’s medal sweep in the women’s
100 meters at the 2020 Olympics.
Placebo Adjusted Weight Loss Among Obese Persons by Therapeutic Approach
(24 Weeks, Highest Dose Used))

-0.4%
#2: Silver : Lilly

#3: Bronze: Lilly

-0.5%
#1: Gold: Lilly

-3.0%
-5.2% -4.8%
-5.7%
-8.0%
-9.7% -9.5%
-11.2%
-11.9%

-16.0%
Retatrutide (Lilly)

Tirzepatide (Lilly)

Orforglipron (Lilly)

Pemvidutide (Altim)

Qsymia (Vivus)

Semaglutide (Novo)

Topiramate (J&J)

Liraglutide (Novo)

Nat / Buprop (Currax)

Orlistat (GSK)

Diet and Exercise

Efpeglanitide (Sanofi)
Source: Stifel analysis of study results for various agents. 13
 The Difference Between Tirzepatide and Retatrutide
Narrows When One Compares Discontinuation Rates
Both retatrutide and tirzepatide are preferred by patients over placebo. But tirzepatide had a more favorable net discontinuation
rate. Of course, studies are not comparable, and a head-to-head comparison could find a different result.

Net Discontinuation Rate (Active Arm vs. Placebo)

20.7%
Preferred
Patients

Placebo
Worse

8.6% 7.9% 7.7%

0.7% 0.5%
Preferred
Patients

Drug

-0.4% -1.2% -2.8%

Better

-4.2% -6.0%
-11.3%
-16.1%

-37.5%
Survodutide (BI/Zeal)

Efpeglanitide (Sanofi)

Cotadutide (AZ)

Bimgrumab (Versanis)

Naltrexone / Bupr (Currax)

Orforglipron (Lilly)

Semaglutide (Novo)

Orlistat (GSK)

Retatrutide (Lilly)

Pemvidutide (Altimmune)

PLENITY (Gelesis)

Tirzepatide (Lilly)

Qsymia (Vivus)

Mazdutide (Innovent)
Source: Stifel analysis of study results for various agents. 14
How Has Lilly Gotten So Good in
Obesity Drugs?
Peter Loftus, Wall Street Journal, “The ‘King Kong’ of Weight-Loss
Drugs Is Coming,” April 3, 2023
Eli Lilly’s Mounjaro could outpace Ozempic as the most powerful treatment on the market. To
develop it, the drug company needed to overhaul long-held but failing practices.

“Dr. Skovronsky recommended Lilly pursue drug projects

where it best understood the science and lean less on
commercial sales estimates. Lilly was not very good at
predicting a drug’s sales over time anyway, he concluded,
but could better predict the scientific probability of a
drug’s success. Focus on
Science
Lilly jettisoned research on diseases where it was tougher Early On
to deliver an advance, including osteoporosis and
psychiatric conditions, and doubled down in areas where
it had expertise: diabetes, oncology and Alzheimer’s
disease.”

Source: https://www.wsj.com/articles/ozempic-mounjaro-weight-loss-drug-wegovy-eli-lilly-66f2906
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Key Lilly Insight: Believe in Mouse Models. They Predict
Efficacy of Obesity Drugs in Humans
Timo D. Müller, Matthias Blüher, Matthias H. Tschöp & Richard D. DiMarchi,
Peter Loftus, Wall Street Journal, “The ‘King Kong’ of Anti-obesity drug discovery: advances and challenges,” Nature Reviews
Drug Discovery, 2022: “weight loss effects generally translate from
Weight-Loss Drugs Is Coming,” April 3, 2023 rodents to humans”

“Lilly scientists expressed hope their drug candidate [Mounjaro]

could do much more than that. The experimental drug combined
a synthesized GLP-1 gut hormone like the one in Trulicity with a
cousin called GIP, which the scientists theorized could produce
even more insulin and suppress appetite further.

Two weeks after starting to get the compound, chubby

laboratory mice given the compound lost 20% to 25% of their
weight.

Despite the unknowns, Lilly went ahead and greenlighted the

experimental drug for human testing. “It was the largest degree
of weight loss I had ever seen in a mouse model of obesity. It felt
pretty compelling,” Dr. Skovronsky said.”

Sources: (1) left: https://www.wsj.com/articles/ozempic-mounjaro-weight-loss-drug-wegovy-eli-lilly-66f2906, (2) right: https://www.nature.com/articles/s41573-021-00337-8/. 16

Key Consideration from an IRA Perspective
Like Tirzepatide, Retatrutide is a 39-amino acid peptide. The good news is that it can be made synthetically. The bad news is
that from an IRA perspective, it is a small molecule – not a biologic. The threshold to file a BLA on a peptide is that a drug
needs to have 40 or more amino acids.* This means that this drug will be eligible for IRA negotiation rather soon after its
approach. Obviously, Lilly developed this drug well before the IRA was passed.

Jalan and Kopath, American Chemical Society, 2023

“Synthetic chemistry has provided access to a wide class of peptides and proteins which was out of bound several decades ago,
particularly peptides containing more than 10-15 amino acids. With the advent of solid phase peptide synthesis (SPPS), peptides longer
than 20 amino acids could be readily built on a solid support through either Boc/Bzl or Fmoc/t-Bu strategies. However, it was still
challenging to synthesize peptides containing 50 or more amino acids by the linear SPPS because of lower yields and reduced purities
with increasing peptide length. Thus, the convergent hybrid strategy becomes highly attractive wherein high purity peptide fragments
can be coupled together in solution phase to overcome the drawbacks of the linear SPPS. Some of the shortcomings of this strategy are
the need for tight control over epimerization because of the limited non-epimerizable coupling junctions, and the decreasing solubility
of the growing protected peptide chain in organic solvents. The introduction of native chemical ligation (NCL) in 1994 has helped
immensely in the synthesis of numerous large peptides and proteins, which were inaccessible earlier. Retatrutide, a 39-amino acid
synthetic peptide, is a once-weekly novel GIP (glucose-dependent insulinotropic polypeptide), GLP-1 (glucagon-like-peptide-1) and
glucagon receptor agonist and is currently in phase 2 clinical trials for diabetes and obesity. Herein, we have developed an NCL synthesis
where two unprotected peptide fragments are coupled in aqueous media without any epimerization to yield retatrutide cysteine
analogue, which is then subjected to desulfurization with water soluble radical initiators to chemoselectively give retatrutide.”

Source: https://acs.digitellinc.com/sessions/531874/view
* See https://www.fda.gov/about-fda/economic-impact-analyses-fda-regulations/definition-term-biological-product-final-regulatory-impact-analysis 17
Picture With 12 Week Data Gets More Complicated
Recall that Retatrutide is associated with 16% weight loss at 24 weeks. Amgen is seeing the same level of weight loss in half the time
and is by far the leader at this point. Amgen has not yet reported data for AMG133 beyond 12 weeks. Based on weight loss curves
over time for other agents, we expect 48-week weight loss with AMG133 to be on the order of 30% to 35% of starting weight.

Placebo Adjusted Weight Loss Among Obese Persons by Therapeutic Approach

(12 Weeks, Highest Dose Used)

-2.0% -2.0%
-3.1%
-4.0% -4.0% -3.9%

-6.6% -6.5%
-8.0% -7.8% -7.5%
-8.5%
-9.2%

-11.5%

-16.0%
AMG133 (Amgen)

Retatrutide (Lilly)

Mazdutide (Innovent)

Survodutide (BI / Zeal)

Orforglipron (Lilly)

Ecnoglutide (SciWind)

Tirzepatide (Lilly)

Pemvidutide (Altim)

Qsymia (Vivus)

Topiramate (J&J)

Semaglutide (Novo)

Liraglutide (Novo)

Nat / Buprop (Currax)

Orlistat (GSK)

PLENITY (Gelesis)
Source: Stifel analysis of study results for various agents. 18
Multiple Agents Showing Game-Changing 4 Week Weight Loss
Amgen has reported 9% placebo-adjusted weight loss with AMG133 at four weeks. Carmot Therapeutics, Viking and Sun Pharma
have also shown game changing four-week weight loss data.

Placebo Adjusted Weight Loss Among Obese Persons by Therapeutic Approach

(4 Weeks, Highest Dose Used))

-1.7% -1.7%
-2.5% -2.5% -2.3%
-3.0%
-3.6% -3.5% -3.5%
-4.2% -4.0% -4.0% -4.0% -3.8%
-4.5%
-5.3%
-6.0%

-7.6% -7.5%
-9.0% -8.7%

-12.0%
Zero Calories

AMG133 (Amgen)

RYGB Bariatric Surgery

CT-868 (Carmot)

800 Calorie Daily

VK2735 (Viking)

GL8034 (Sun Pharma)

Mazdutide (Innovent)

Retatrutide (Lilly)

CagriSema (Novo)

Cotadutide (AZ)

Orlistat (GSK)

INV-202 (Inversago)

Pemvidutide (Altimmune)

Danuglipron (Pfizer)

Survodutide (BI/Zeal)

Orforglipron (Lilly)

Liraglutide (Novo)

Tirzepatide (Lilly)

Qsymia (Vivus)

Nat / Bupr (Currax)

Semaglutide (Novo)
Source: Stifel analysis of study results for various agents. 19
Carmot Therapeutics Dual Incretin, CT-268, Showing
Highly Impressive 4-Week Weight Loss at ADA
SAN DIEGO, Calif., June 23, 2023 (GLOBE NEWSWIRE)

Poster No. 75-LB: CT-388, a novel once-weekly dual GLP-1 and GIP receptor modulator, is safe, well-tolerated, and produces more
than 8% weight loss in 4 weeks in overweight and obese adults

As part of a larger Phase 1/2 clinical trial, the Phase 1 results presented at ADA comprised single ascending doses (SAD; 0.5-7.5 mg)
and multiple ascending doses (MAD; 5-12 mg) for 4 weeks administered to overweight/obese adults. The primary objective, safety
and tolerability of CT-388, was evaluated across a total of 64 participants who received at least one dose of CT-388 or placebo. The
results were as follows across the three MAD cohorts:
▪ Favorable tolerability profile in both overweight and obese participants with most common adverse events (AEs) being GI-
related, consistent with the incretin class. No temporal patterns for AEs around dose up-titration periods.
▪ Pharmacokinetic (PK) profile supports once weekly dose administration.
▪ CT-388 dosed at 5/8/12/12 mg produced 8.4% weight loss (7.7 kg, ~17 lbs) accompanied by a decrease in waist and hip
circumference, and improvement in markers of insulin sensitivity (HOMA-IR). Initial profile suggests that obese patients might
benefit the most given the higher weight loss and more favorable tolerability.
▪ These data warrant further clinical evaluation of CT-388, possibly with minimal to no titration, for the treatment of obesity, type
2 diabetes and other weight-related comorbidities. Carmot has designed the Phase 1/2 CT-388 clinical trial to evaluate not only
higher doses across longer treatment durations (e.g. 12-24 weeks), but also cohorts with minimal to no titrations. Carmot
expects data from these additional cohorts in the first half of 2024. Additional Phase 2 clinical trials in overweight and obese
adults are planned to commence in 2023.
Source: https://carmot.us/carmot-therapeutics-highlights-clinical-data-from-its-pipeline-of-treatments-for-obesity-and-diabetes-at-the-83rd-american-
diabetes-association-scientific-sessions/
20
Strength of Viking’s VK2735 at Four Weeks

There is a lot to like about Viking’s story. Unlike Amgen’s drug there
were no discontinuations at the high dose.

Unlike Carmot’s story, patients in the MAD portion had BMI’s under
30 (Carmot’s high dose group had a starting BMI average of 34.9). It
is well known that percentage weight loss tends to be lower when
baseline BMI is lower.

We see Viking as a relatively tolerable dual competitor in the market.

Source: https://www.prnewswire.com/news-releases/viking-therapeutics-announces-results-from-phase-1-clinical-trial-of-dual-glp-1gip-receptor-agonist-vk2735-301782861.html 21
Sun Pharma’s Long-acting GLP-1 Receptor Agonist

Sun’s new GLP-1 agonist at ADA was a surprise to us.

10.7% weight loss at 52 days is highly competitive and it’s far from clear
that Sun has yet optimized dose. Nausea rates with the drug were quite
low and their Phase 1 only included male subjects who tend to
experience lower weight loss than females with GLP-1’s, on average.

Sun is a low-cost manufacturer and is willing to compete on price.

They could be a very interesting addition to the U.S. obesity market

which is in dire need of price competition.
Source: https://www.prnewswire.com/news-releases/sun-pharma-presents-data-from-first-in-human-phase-1-studies-of-gl0034-at-the-american-diabetes-association-83rd-scientific-sessions-301861402.html, ADA presentation. 22
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

Details on Amgen’s AMG133

23
 AMG 133 Antagonizes GIP and Agonizes GLP-1
To create AMG 133, Amgen researchers started with an antibody that
blocks GIPR (GIP Receptor).

To this antibody backbone, they then added two modified GLP-1

peptides that activate the GLP-1 receptor.

Preclinical research at Amgen confirmed that this dual action, or

bifunctionality that targets these two key metabolic pathways, seemed
to have a stronger effect on weight loss than either GLP-1 or GIPR
antibodies alone.

Gastric inhibitory polypeptide (GIP) is a 42-amino acid hormone made

in K-cells localized to the proximal gut, and it is secreted after eating
food containing glucose and fat.

Although originally named as an acid blocker, the principal property of

GIP is the stimulation of insulin release from pancreatic islet β-cells in
the presence of glucose. Accordingly, GIP is also known as “glucose-
dependent insulinotropic polypeptide”.

GIP enhances gut nutrient absorption, and it increases uptake of

glucose into fat cells. Importantly, GIP increases insulin release which
further improves nutrient uptake and storage.

Source: https://www.amgen.com/stories/2022/12/targeting-obesity-using-biology-not-behavior 24
 Amgen Work on GIP Receptor Motivated by Rare Genetic
Variants Seen in GWAS Studies by its deCODE Subsidiary

“Further obesity research at Amgen and Icelandic subsidiary deCODE Genetics began looking at the effects of
rare genetic changes, called variants, on Body Mass Index (BMI), a measure of body fat based on height and
weight. The Centers for Disease Control and Prevention (CDC) defines obesity as having a BMI of 30 or higher.
deCODE looked for variants associated with low BMI in human data accumulated from hundreds of thousands
of individuals across biobanks from several countries, with the idea that these could be valuable drug targets.

The deCODE work and other research uncovered variants in the GIPR (Gastric Inhibitory Polypeptide Receptor)
gene that were particularly interesting. GIP and its receptor are involved in regulating insulin levels after eating.
Individuals with specific variants in this gene that reduced its activity had lower BMIs. Further analysis by
Amgen researchers confirmed this finding.”

Amgen cites to GWAS work

1. Nature Genetics 2012; 44 (3):302-6
2. Nature Genetics 2010; 42 (11):937-48 (deCODEis collaborator)
3. Nature Genetics 2013; 45 (5):501-12 (deCODEis collaborator)
Source: https://www.amgen.com/stories/2022/12/targeting-obesity-using-biology-not-behavior
4. Science 2021; 373 (6550)
25
Mice With Loss-of-Function Mutations in GIPR Gain Only a
Third of Weight of Normal Mice When Fed High Fat Diets
Normal mouse 3x GIPr KO mouse gains weight
heavier at 36 but only modestly despite HF “Secretion of gastric inhibitory polypeptide (GIP), a duodenal
weeks diet hormone, is primarily induced by absorption of ingested fat. Here
we describe a novel pathway of obesity promotion via GIP.

Wild-type mice fed a high-fat diet exhibited both hypersecretion of

GIP and extreme visceral and subcutaneous fat deposition with
insulin resistance.

In contrast, mice lacking the GIP receptor (Gipr(-/-)) fed a high-fat

diet were clearly protected from both the obesity and the insulin
resistance. Moreover, double-homozygous mice (Gipr(-/-),
Lep(ob)/Lep(ob)) generated by crossbreeding Gipr(-/-) and obese
ob/ob (Lep(ob)/Lep(ob)) mice gained less weight and had lower
adiposity than Lep(ob)/Lep(ob) mice. The Gipr(-/-) mice had a lower
respiratory quotient and used fat as the preferred energy substrate,
and were thus resistant to obesity. Therefore, GIP directly links
overnutrition to obesity and it is a potential target for anti-
Fig. 2 Inhibition of GIP signal prevents hyperphagia-induced obesity.
a and b, Gross appearance of Lepob/Lepob (a) and Gipr–/– Lepob/Lepob (b) mice. obesity drugs.”
c, Body weight of WT (), Lepob/Lepob () and Gipr–/– Lepob/Lepob mice () at
35 wk of age. n = 4; *, P < 0.05, compared with Lepob/Lepob mice. d, TOBEC
of WT (), Lepob/Lepob () and Gipr–/– Lepob/Lepob () mice at 35 wk. n = 4;
Source: https://pubmed.ncbi.nlm.nih.gov/12068290/
**, P < 0.01, compared with Lepob/Lepob mice.
26
The Scale of Weight Loss Seen with AMG133 Has Never
Been Seen Before with a Pharmacological Agent

The observed weight

loss with a GLP1 agonist
and GIPr antagonist
corresponds to going
from 250 pounds to 215
pounds in three months.

The weight loss slope at the

420mg dose is extreme. Patients
lost 1% of their body weight
every four days.

Note that two subjects dropped out of the Phase 1b at the high dose.
This discontinuation rate is not unusual for the GLP-1 class, however. 27
AMG133 Was Dosed Q4W – Once Monthly

28
Understanding GIP: Insulin Signaling is Essential to Life. Without
Insulin We Can’t Store Energy. Without Energy We Starve.
Type 1 Diabetes Induces Starvation Because Patients Can’t Make Insulin Needed to Convert Glucose to Fat. Similarly,
by reducing insulin production by roughly 60% to 70% a perfect GIP inhibitor can induce the effect of partial
starvation despite eating a normal amount of food.
Before and after pictures of child treated with insulin in the 1920s. Lilly got insulin to this child just in time.

Type I diabetes has been described as ‘starvation

in the midst of plenty.’ Despite hyperphagia and
high levels of circulating fuels, insulin deficiency
prevents effective use of fuels by many tissues,
hence ‘starving’ them of nutrition.”*

Prior to the invention of insulin, children with

Type 1 diabetes starved to death. To the left is a
remarkable photo of a child who was fortunate
to get access to Lilly’s insulin before death by
starvation.

* Endocr Rev, Volume 40, Issue 1, February 2019, Pages 1–16

29
Understanding GIP: When Glucose Goes Through the
Gut Something Happens: GIPr is Agonized
A landmark study performed in humans was published in 1964 in Lancet.1

The study showed that blood insulin levels were about three times greater after
humans consumed glucose compared to when it was given intravenously (IV), while
blood glucose levels were similar.

Thus, something in the intestine was responsible for 2/3 of the effect; a yet to be
identified incretin hormone.

The principal incretin hormone proved to be gastric inhibitory polypeptide (GIP).2

Explanation: IV glucose bypasses the gut which avoids agonism of GIP, in turn resulting
in less insulin signaling.

Saltiel and Kahn identified GIP as

1 McIntyre N et al. Lancet 1964; 2:20-21 the main explanation of why insulin
2 Saltiel AR and Kahn CR. Nature 2001; 414:799-806 production largely requires that
glucose pass through the gut.
30
Boylan and Wolfe: GIP Blockade = Big Effect on Weight
▪ Mike Wolfe and Mike Boylan conducted a series of pathbreaking
experiments at Case Western in which they explored whether GIP
blockade might be a good strategy for weight loss.
▪ This work was independent of Amgen’s genetic work but led to
very similar insights.
▪ In this seminal study done in C57BL/6 mice, a GIP antibody
attenuated the insulin response to oral glucose by 2/3 (similar to
the 1964 human study in Lancet) and eliminated the insulin
response to co-administered intraperitoneal glucose.
▪ The effect of the anti-GIP mAb on weight was dramatic; weight
gain decreased by 46.5% and was equivalent to the low-fat diet
control mice.
▪ There were no differences in the amount of food consumed
among the treatment groups.
▪ An intriguing possibility with GIP blockage is that the nausea and
potential muscle loss side effects of GLP-1’s could be avoided.
You eat the same amount of food but just fail to store it as fat
because you are making less insulin.
Source: Boylan MO et al. Am J Physiol 2015; 309:E1008-E1018.

31
Amgen Scientists Replicate Boylan and Wolfe Findings with
GIPr Antagonist and Dual GIP and GLP1 Modulator
Weight changes in monkeys similar to those seen Food consumption down around a
Killion et al., Science Translational Medicine, 2018 in humans with AMG133. Adding the GIPr third with mono GIPr or GLP-1 and
antagonist makes a big difference. down 70%+ with dual GIPr and GLP-1.

Mono GIPr inhibition reduces NHP insulin by around 65%

when monkeys were subject to a glucose challenge.
Source: https://www.science.org/doi/10.1126/scitranslmed.aat3392
32
Other GIP Antagonists in Development

We are aware of at least

three companies working on
various strategies to block
GIP. Each has its pro’s and
con’s. NM-136 is an antibody that The research teams of professors GMAX is a Chinese biotech that
blocks glucose-dependent Mette M. Rosenkilde and Jens J. was established by Amgen
insulinotropic polypeptide (GIP), Holst have discovered naturally alums. Their GMA 106 is
a hormone found in the upper occurring therapeutic peptides rationally designed using GMAX’s
small intestine that is released that are being investigated in GPCR and M-Body technologies.
into circulation after food is several human studies. Like AMG133, this M-body is
ingested. NM-136 has been composed of an anti-GIPR anti-
shown to prevent GIP from Antag is pursuing a peptide body fused with a GLP1 peptide.
binding to its receptor, which in approach to antagonizing GIP It can simultaneously interact
preclinical obesity models has and is currently in the process of with GLP-1R and GIPR and
been shown to significantly completing preclinical studies. regulate both signaling pathways
decrease weight and abdominal to synergistically suppress
fat by reducing nutrient The company expects to be in appetite, reduce blood glucose
absorption from the intestine. 9 the clinic in 2024. and fat accumulation, and
Meters indicates that it may be in improve insulin resistance. This
Phase 1 with this compound by drug is well into Phase 1 studies
2024. at present.
33
Paradox: How Can AMG133 (Which Antagonizes GIP) and
Tirzepatide (Which Agonizes GIP) Both Be So Effective?

J Clin Endocrinol Metab. 2020 Aug 1;105(8):e2710–6.

Another important difference is that GLP-1 inhibits appetite and food intake (5), resulting in weight loss upon chronic administration,
whereas GIP generally is thought to have no effects on food intake (6). Despite this, some researchers have kept working with GIP and
have developed analogs, modified to have activity also on other receptors including the GLP-1 receptor. Application of these in clinical
trials has been surprisingly successful. Most recently, the pharmaceutical company, Eli Lilly, presented impressive Phase 2 results in
overweight patients with T2DM treated with tirzepatide, a mono-molecular, long-acting (weekly) GIP-GLP-1 co-agonist (7). A 6-month
treatment with this compound resulted in near-normalization of glycated hemoglobin levels and weight losses reaching 2-digit
percentages, with both effects exceeding what was obtained in the same study with a long-acting GLP-1 receptor agonist, dulaglutide.
Increasing the confusion even further, another company, Amgen, presented preclinical data from nonhuman primates showing that a
GIP receptor antagonist (a monoclonal antibody), both alone and in combination with GLP-1, effectively reduced the normal increase
in body weight in obese animals (8). In addition, upon comparison of results from animal studies, it appears that almost identical
results can be obtained with certain proven GIP agonists and GIP antagonists, at least with respect to their effects on body weight (8-
10). In other words, both GIP agonism (normally thought to be inactive) and GIP antagonism appear to be effective in T2DM
and obesity.

Source: https://academic.oup.com/jcem/article/105/8/e2710/5847843 34
Paradox Addressed: Tirzepatide’s GLP-1 Signalling Likely
Enhanced by GIP Co-Agonism

J Clin Endocrinol Metab. 2020 Aug 1;105(8):e2710–6.

Nevertheless, it was recently shown that N-terminal modifications of exendin-4 (a strong GLP-1 receptor agonist) will turn it into a
biased agonist with a lower tendency to arrestin recruitment and/or receptor internalization and therefore with potentially greater
efficacy and tolerability as a therapeutic (58). A similar alteration in GLP-1 receptor signaling profile was recently established for a dual
acting GIP-GLP-1 peptide (59). It is thus possible that the observed beneficial effects in vivo of dual GIP-GLP-1 agonists—at least
partly—rely on altered signaling of the molecule toward a biased signaling profile for one, or both, of the components. If both
mechanisms apply to the GIP- GLP-1 co-agonists, the effect might be even greater. It is still unclear how the GIP part of the co-agonist
would lead to weight loss, but if the incorporation of GIP activity in the co-agonist changes the GLP-1 signaling, then it would
make sense that even the GIP part of the molecule might contribute to an enhanced weight-losing effect. It should be possible
with careful molecular pharmacological experimentation to determine whether it is the influence of one part of the co-agonist (GIP) on
the signaling pathways of the other part that makes a co-agonist like tirzepatide so effective, despite the overwhelming evidence that
GIP, investigated in isolation, does not possess these activities. Such experiments are ongoing, and we will probably soon have at least
some answers to this mind-boggling paradox.

Source: https://academic.oup.com/jcem/article/105/8/e2710/5847843 35
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

Unmet Needs in the Obesity Drug Landscape

36
Significant Room for Players to Compete by Feature
Differentiation
Allison Gatlin, Investors Business Daily, Dec 8, 2022

“But Narimon Honarpour, Amgen's vice president of

general medicines, says there's room for multiple
medications in the obesity treatment market. More than
600 million people have obesity, including 40% of the U.S.
population. Not all patients respond well to one drug, he
said.

‘Unraveling which patient segment benefits the most from

which therapy, having a consistent response to therapy
from patients is very important," he told Investor's Business
Daily. "What I think we can conclude — though I can't give
you a firm number on what the market size and
opportunity would be — is that it's going to be, and is
currently, a very large market.’”

Source: https://www.investors.com/news/technology/amgen-stock-here-is-what-we-know-about-its-belated-obesity-treatment/. Photo from Getty Images.

37
Key Unmet Needs in Obesity Drug Development
For all the progress that has been made, there is ample room for new entrants to gain footing by
addressing unmet needs that remain with existing therapies. Key unmet market needs include:

1 Avoidance of Nausea Side Effect

2 Avoidance of the “Rebound Effect”

3 Reduction in Drug Cost

4 Oral Delivery

5 Avoidance of Muscle Loss

6 Less Frequent Dosing

7 Drugs That Can be Safely Provided Direct to the Patient

38
#1: Nausea is an Issue with GLP-1 Agonists
Optum Pharmacy Care Services, 2023

Since GLP-1 agonists impact many physiological processes, side effects A key priority is to
are not uncommon. Some that are common to all GLP-1 agonists design out the nausea
include nausea, vomiting and diarrhea. Other possible side effects for side effect associated
GLP-1 agonists include pancreatitis, increased risk of low blood sugar, with the current
kidney problems and changes in vision. generation of GLP-1
drugs.
Injected weekly, Wegovy is essentially a higher dosage of semaglutide.
While Ozempic is injected at a dosage of 0.5 mg or 1 mg for type 2
diabetes, the dose for Wegovy is 2.4 mg. To reduce the potential for
side effects, the dose of Wegovy is gradually increased over 16 to 20
weeks.

In addition to these common side effects, Wegovy contains a boxed

warning about the potential risk of thyroid C-cell tumors.

Source: https://www.optum.com/business/insights/pharmacy-care-services/page.hub.diabetes-drugs-obesity.html 39
#2: The Rebound Effect

Diabetes, Obesity and Metabolism, April 2022

“One year after withdrawal of once-weekly

subcutaneous semaglutide 2.4 mg and lifestyle
intervention, participants regained two-thirds
of their prior weight loss, with similar changes
in cardiometabolic variables. Findings confirm the
chronicity of obesity and suggest ongoing
treatment is required to maintain improvements in
weight and health.”

Source: https://dom-pubs.onlinelibrary.wiley.com/doi/10.1111/dom.14725

40
The Rebound Effect: Is it a Bug or a Feature?
People who overeat appear to put their weight back on when they go off GLP-1’s.

From a pharma perspective this is a desirable feature. Patients will need to be on their obesity
drugs forever basically or will regain weight.

Each patient becomes quite valuable. If you could get paid $1,000 a month forever, the NPV
would work out to $120,000 if you had a 10% discount rate (model for value of a perpetuity). To
be clear, other CVM drugs for blood pressure and lipids also require long-term administration. It’s
not as if obesity drugs are uniquely burdensome in this regard.

From a payor / societal perspective, this is quite challenging. If you must cover a million
persons at $120k / each, you would be on the hook for $120 billion in expense. But there are over
50 million obese persons in the U.S. The cost is very high.

Physicians are also concerned. We have spoken to several who worry about putting their
patients on GLP-1’s forever. The data suggest that long-term administration of GLP-1’s is not
“Ninety-four surveys were analyzed. Seventy-six
associated with safety issues and patients continue to benefit (see, for example, Courtney et.al.
percent of all PCPs did not prescribe weight loss
(2017) for seven-year data).* As shown in the chart at right, many physicians prefer to avoid medications for long-term weight loss and 58% of
weight loss drugs. In one recent survey, physicians indicated that they see 136 obese patients a PCPs had negative perceptions of pharmacotherapy.
month; these physicians planned to keep only a third of their GLP-1 patients on the drugs Differences existed between prescribing patterns and
indefinitely. Physicians are conservative when it comes to new drugs. attitudes of advanced practice clinicians and
physicians. Safety concerns were the greatest barrier.
A particular physician concern expressed at ADA with rebound is that patients may Having 2+ comorbidities and severe obesity were
lose muscle on the way down and then replace it with fat on the way up. facilitators for prescribing weight loss medications.”

Source: https://onlinelibrary.wiley.com/doi/abs/10.1002/2327-6924.12481
* Note: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5357070/ 41
 Sheldon Litwin, Medical University of South Carolina

#3: Cost is a Major Issue

Sheldon Litwin, MD, a cardiologist at the Medical
University of South Carolina, Pharmacy Times, Mar 8,
2023

“The other big issue with the new drugs is the cost. And
they’re very, very expensive drugs. I don't know if they have
to be or not, but they are. And when we're prescribing them
for diabetes, they're usually covered by insurance, although
there may be a higher copay. But if we're giving them just
for weight loss in patients that don't have diabetes, at this
point in time, most insurance plans and most federal plans
like Medicare are not covering the cost of the medicines.
And they're retailing for about $1,300 a month or $16,000 a
year, which is not affordable for most of my patients. So,
access is still a big issue.”

Source: https://www.pharmacytimes.com/view/expert-following-decades-of-
challenges-anti-obesity-drugs-have-leapt-forward-in-recent-years 42
 ICER’s view expressed
here is that as currently
priced the GLP-1’s are
too expensive to justify
reimbursement.

Both Lilly and Novo are

running studies today to
disprove this type of
analysis by showing the
societal savings from
using obesity drugs.

But clearly an unmet

need in the market is to
deliver strong weight
loss at a lower price.

Source: https://icer.org/wp-content/uploads/2022/03/ICER_Obesity_Evidence_Report_083122.pdf 43
 #4: Oral Options Desirable

Michael Erman, Reuters, “Novo Nordisk rivals see room to compete in $100
billion weight-loss drug market,” May 8, 2023

“Pfizer believes an oral therapy will appeal to people who want to avoid
injections. The company plans to enroll some patients in its late-stage trial who
have already used Wegovy or Mounjaro to show they can effectively switch to
the Pfizer alternative.

Eli Lilly is working on an oral GLP-1. Novo Nordisk already offers Rybelsus, an
oral version of the same compound (semaglutide) in Wegovy for diabetes,
although its success has been limited.

"More treatment options to help improve the lives of those living with obesity
are good advancements for patients and a testament to the significant unmet
need of addressing obesity," a Novo spokesperson said.
Many patients prefer an oral option.
Dr. Jamie Kane, chief of obesity medicine at New York's Northwell Health,
called the new weight-loss drugs ‘very promising.’”

Source: https://www.reuters.com/business/healthcare-pharmaceuticals/novo-nordisk-rivals-see-room-compete-100-bln-weight-loss-drug-market-2023-05-04/. Photo from Getty Images.

44
Selected GLP-1 Oral Drug Candidates in Development

Orforglipron Danuglipron

Saima Sidik, “Beyond Ozempic: brand-new Pfizer, Press Release, June 26, 2023
Structure Therapeutics completed a Phase 1 study
obesity drugs will be cheaper and more
of GSBR-1290, an orally available small molecule
effective,” Nature, June 26, 2023 Pfizer Inc. (NYSE: PFE) today announced its decision to
GLP‐1 receptor agonist being developed for the
continue to progress one oral late-stage glucagon-like
“Both Wegovy and Mounjaro require weekly injections, treatment of patients with type 2 diabetes mellitus
peptide-1 receptor agonist (GLP-1-RA) candidate toward
which many people find unpleasant. What’s more, the and obesity. The Company completed its Phase 1
further clinical development for the potential treatment
drugs both belong to a group of molecules called single ascending dose (SAD) study in September
of adults with obesity and Type 2 diabetes mellitus
peptides, which are expensive and labour-intensive to 2022. GSBR-1290 was generally well tolerated and
(T2DM). Results previously published in the Journal of
produce. The list prices for Wegovy and Mounjaro are demonstrated dose-dependent pharmacokinetic
the American Medical Association Network Open from
more than US$1,000 per month, and supply shortages (PK) and pharmacodynamic (PD) activity in 48
the Phase 2 study (NCT03985293) of danuglipron in
have sometimes made the drugs hard to find. healthy volunteers. The Company has completed
T2DM showed dose-dependent placebo-adjusted
Orforglipron, however, is a non-peptide molecule that’s dosing of its Phase 1b multiple ascending dose
reductions (doses ranging from 2.5 mg through 120 mg
easy to produce and package into a pill. The drug’s price (MAD) study focused on safety, PK and tolerability
for 16 weeks) in HbA1c of up to -1.16%; fasting plasma
has not yet been set, but it will probably be much in 24 healthy volunteers, and has initiated a Phase
glucose of -33.24 mg/dL; and body weight of -4.17 kg
cheaper than existing weight-management drugs, says 2a study in T2DM and obesity. Topline data from
over 16 weeks. The most common adverse events were
internal-medicine physician Sean Wharton at McMaster the Phase 1b MAD study and the Phase 2a study
nausea, vomiting and diarrhea. The Phase 2b study of
University in Hamilton, Canada. “I see it as a game are expected to be announced in the latter half of
danuglipron in non-diabetic obesity participants is
changer, myself,” says Wharton, who co-authored the the fourth quarter of 2023.
currently ongoing (doses ranging from 40 mg through
orforglipron study.” 200 mg for up to 32 weeks) and expected to complete
by end of year.

Sources: (1) Lilly: https://www.nature.com/articles/d41586-023-02092-9, (2) Pfizer: https://www.pfizer.com/news/press-release/press-release-detail/pfizer-provides-update-glp-1-ra-clinical-development 45

New England Journal of Medicine, June 23, 2023

In this phase 2, randomized, double-blind trial, we enrolled adults with obesity, or with
overweight plus at least one weight-related coexisting condition, and without diabetes.
Participants were randomly assigned to receive orforglipron at one of four doses (12, 24, 36,
or 45 mg) or placebo once daily for 36 weeks. The percentage change from baseline in body
weight was assessed at week 26 (primary end point) and at week 36 (secondary end point).

A total of 272 participants underwent randomization. At baseline, the mean body weight was
108.7 kg, and the mean body-mass index (the weight in kilograms divided by the square of
the height in meters) was 37.9. At week 26, the mean change from baseline in body weight
ranged from −8.6% to −12.6% across the orforglipron dose cohorts and was −2.0% in the
placebo group. At week 36, the mean change ranged from −9.4% to −14.7% with orforglipron
and was −2.3% with placebo. A weight reduction of at least 10% by week 36 occurred in 46 to
75% of the participants who received orforglipron, as compared with 9% who received
placebo. The use of orforglipron led to improvement in all prespecified weight-related and
cardiometabolic measures. The most common adverse events reported with orforglipron were
gastrointestinal events, which were mild to moderate, occurred primarily during dose
escalation, and led to discontinuation of orforglipron in 10 to 17% of participants across dose
cohorts. The safety profile of orforglipron was consistent with that of the GLP-1 receptor
agonist class.
Source: https://www.nejm.org/doi/full/10.1056/NEJMoa2304286
46
Emerging Opportunity for Oral Polypills

In the same sense that we are seeing

incretin protein companies
developing duals and triple combos,
it should be possible to combine Vutiglabridin is an orally available
multiple active agents to create a Regeneron and AZ are in a
collaboration to target GPR75 for modulator of mitochondrial
particularly effective oral anti- paraoxonase-2 (PON2). It has completed
obesity medication. obesity. This is based on REGN’s finding
that mutations in the GPR75 gene its phase 1 studies with optimal safety
associated with protection against profile and target exposure, and its phase
For example, both Vivus’ Qsymia® 2a study for the treatment of obesity is
and Currax’s Contrave® combine obesity.
near completion.
known active agents.

The four companies shown at right

have particularly promising oral
options for the treatment of obesity. Inversago had impressive Phase 1 obesity Kallyope is testing two compounds in
data with a CB1 inverse agonist at ADA. Phase 1b trials in 2023. They expect to be
It strikes us that one might be able Now going into other indications in Phase producing data in obesity as the year
to combine these approaches to 2 studies. MOA same as rimonabant but unfolds in both obese subjects and in
develop a highly effective polypill. company has engineered out toxicity persons with Type 2 diabetes.
issues. Private Canadian biotech company.

47
GWAS Study by Regeneron Discovers GPR75 Target

Murtaza et.al., Biochimie, April 2022:

The metabolic syndrome is a plethora of related

disorders that are frequently associated with
morbidity and mortality in addition to economic
burden. While various treatment options are
available, the need to understand the pathology and
find new targets still remains.

Recent data have suggested GPR75 as one such

exciting target that has shown to a highly druggable
potential. In this review, we have discussed the
recent findings on GPR75 in terms of its expression
and signaling and the way it could be a novel target
in diseases associated with metabolic syndrome
including obesity, dyslipidemia, diabetes,
cardiovascular disease, and cerebrovascular disease.
In addition, the opportunities and challenges related
with the druggable potential of GPR75 have also
been highlighted in this review.
Sources: https://www.science.org/doi/10.1126/science.abf8683,
https://newsroom.regeneron.com/news-releases/news-release-
details/regeneron-genetics-center-discovers-gpr75-gene-mutations-protect,
https://www.sciencedirect.com/science/article/abs/pii/S0300908422000141

48
 Kallyope Pursuing Orals Involving Gut-Brain Axis
Richards P, Thornberry NA, Pinto S. The gut-brain axis: Identifying new therapeutic approaches for
type 2 diabetes, obesity, and related disorders. Mol Metab. 2021 Apr;46:101175.
Led by Jay Galeota and Nancy Thornberry,
Kallyope harnesses multiple incretins to induce “As nutrients and bile acids pass
a weight loss effect and can design therapeutics through the duodenum and into the
that turn on or turn off specific incretins. jejunum, multiple EECs containing
GLP-1, PYY, and NTS as well as CCK,
The company is focused on direct targeting of GIP, and SCT are activated. All of the
gut-brain circuits using a next generation receptors for these peptides, with the
exception of GIP, are expressed by
approach highlighted at right.
vagal afferents. GLP, PYY, and CCK
receptors have been detected in the
Kallyope is testing two compounds in Phase 1b ENS. GLP-1, GIP, PYY, and NTS
trials in 2023. They expect to be producing data receptors are expressed in central
in obesity as the year unfolds in both obese feeding centers. How these
subjects and in persons with Type 2 diabetes. hormones signal to the brain alone
and in combination after a meal has
While the MOA has not been specifically yet to be fully determined, but when
released, Kallyope has a published patent which co-infused, they produce strong
described four potential targets for its drugs satiety effects.”
and can deliver these targets solo or in
combination. “The role of the gut-brain axis has been particularly well established in regulating appetite
and metabolism. Indeed, gut hormones, most notably GLP-1, have been pursued as
therapeutics in multiple drug discovery programs for diabetes and obesity over the past two
The article cited at right lays out the approach
decades. While some of the beneficial effects of GLP-1 and other gut hormones, most
described in the patent. Key targets include notably glucose control, may not involve gut-brain circuitry, the importance of this system
GPR40, AMPK, GPR119 and SSTR5. in the regulation of feeding has been clearly established.”

Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8085592/
49
Inversago Pharma’s INV-202, a Peripheral
Cannabinoid Receptor 1Blocker for Metabolic
Syndrome, is Highly Promising
June 23, 2023 - MONTREAL & SAN DIEGO--(BUSINESS WIRE)--Inversago Pharma Inc. (“Inversago”), a leader in Inversago popped up at
the development of peripherally-acting CB1 receptor (CB1r) blockers to address complications associated with metabolic ADA with striking data for
and fibrotic diseases, today announced data from its Phase 1b trial for INV-202 to be presented in a poster session at the a CB1r blocker showing
83rd American Diabetes Association Scientific Sessions (ADA) in San Diego. INV-202 is a potential first-in-class, 3.8% placebo-adjusted
peripherally-acting CB1r blocker, being developed to treat metabolic syndrome and associated complications. The Phase weight loss in patients with
1b study was a randomized, double-blind clinical trial conducted in 37 adult subjects (46% female; mean age, 55 years) metabolic syndrome at
with features of metabolic syndrome to evaluate the PK/PD relationship and other biomarkers of 25 mg of INV-202 four weeks. These data are
administered orally, once daily, over 28 days. Metabolic syndrome was defined by hypertriglyceridemia, abdominal similar in magnitude to
obesity, and impaired glucose tolerance. At 25 mg, INV-202 was well-tolerated with no serious adverse events (SAEs) what has been seen with
reported during the treatment period. Observed adverse events (AE) were predominately GI related. other oral agents including
Orforglipron and are
In the post-hoc analysis, over the 28-day treatment period, clinically significant and progressive weight loss of an average stronger than what has
decline of 3.50 kg (7.7 lb) for the INV-202-treated subjects was shown. This compared with a gain of 0.55 kg (1.2 lb) on been seen with Pfizer’s oral
average for subjects on placebo (p<0.01). Weight loss for subjects treated with INV-202 averaged a 3.3% decline versus GLP-1. What is interesting
a 0.5% gain for subjects on placebo (p<0.01). Average waist circumference was reduced by -1.91 cm (-3/4 in) for treated here is that the CB1r MOA
subjects compared to an increase of +0.02 cm (+1/64 in) for subjects on placebo (p=0.03). is orthogonal to what
others are doing and could
INV-202-treated subjects also reported average decline in hemoglobin A1C (HgbA1C) of -0.005% over the treatment make for good combo
period versus an increase of +0.065% for subjects on placebo (p=0.08). therapy approaches.

Source: https://www.businesswire.com/news/home/20230623384277/en/Inversago-Pharma-Presents-Data-from-Phase-1b-Trial-of-INV-202-a-Peripheral-CB1r-
Blocker-for-Metabolic-Syndrome-at-the-83rd-American-Diabetes-Association-Scientific-Sessions
50
#5: Avoidance of Muscle Loss a Priority
The median percent of weight lost in past GLP-1 agonist studies due to loss of lean mass is in the low 40’s.
Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ. A Review of the Effects of Glucagon-Like Peptide-1 Receptor
Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body Mass in Humans. Endocrinol Metab (Seoul). 2019
Sep;34(3):247-262

Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6769337/
51
Muscle Mass Loss is Typical in Obesity Management
Advisory Board, “Another semaglutide side effect: Loss of muscle mass?,” March 23, 2023

“Endocrinologists and obesity medicine specialists said that while muscle mass loss can be a side effect of semaglutide, it is not
unique to the drug or the GLP-1 agonist drug class.

"Muscle mass loss is part-and-parcel to losing weight," said Amy Rothberg of the University of Michigan, who is also a
spokesperson for the Endocrine Society. "So in the context that semaglutide helps people lose weight, they are going to lose
muscle mass."

"But you lose muscle mass irrespective of the modality, whether that's diet and exercise, bariatric surgery, or medications," she said.

Karl Nadolsky, an endocrinologist and obesity medicine specialist at Holland Hospital, noted that "all weight-loss interventions
result in some lean mass loss." According to Nadolsky, lean mass loss involves both muscle loss and things like fluid loss. Nadolsky
highlighted subgroup data from the STEP 1 Study — semaglutide's primary clinical trial — which looked at 95 people who were on
the drug and 45 people who received a placebo. The researchers conducted scans on all participants to monitor their body mass.

Participants who received the drug lost an average of 10.4% of their fat mass and 6.9% of their lean body mass, and participants
who received a placebo lost an average of 1.2% of their fat mass and 1.5% of their lean body mass. "The placebo group lost almost
50% more lean mass than fat mass," Nadolsky said. While the data indicate that the drug caused lean mass loss, "the percentage of
fat mass loss to lean mass loss is favorable.“ According to Rothberg, people generally lose fat mass to lean mass at a ratio of 2:1.
While this varies by age, gender, and physical conditioning, Rothberg noted that the STEP 1 data appear to fall within those
parameters.”

Source: https://www.advisory.com/daily-briefing/2023/03/22/wegovy-muscle-mass
52
 Tirzepatide Associated with Much More Fat
Mass Loss than Lean Mass Loss

Source: https://www.nejm.org/doi/full/10.1056/NEJMoa2206038
53
 Muscle Loss is of Particular Concern with Older Patients
Andrea Petersen, “Ozempic Can Make You Thin, Not Necessarily Healthy,” WSJ, June 28, 2023

“When people lose weight, particularly when they lose a lot of weight quickly as can happen with
Ozempic and other GLP-1 medications, they lose not only fat but also lean muscle mass. Lean muscle
is important for strength and metabolism (since muscle burns more calories than fat) and high-
protein foods like chicken, fish, eggs and tofu contain the amino acids that are building blocks of
muscle, says Dr. Amanda Velazquez, director of obesity medicine at Cedars-Sinai in Los Angeles.

Gudzune is particularly concerned about the loss of muscle mass with her patients ages 70 and older
who are on GLP-1 drugs. Muscle loss can lead to falls and difficulty doing daily movements that are
important for remaining independent, such as getting up and down from a chair, she notes. Gudzune
says she starts her older patients taking GLP-1 medications on a strength-training routine with a
resistance band.”

Source: https://www.wsj.com/articles/ozempic-diet-exercise-healthy-43eee86c
54
Drug Development Candidates that Are Promising for
Selectively Targeted Fat Over Muscle Mass
There are a number of approaches
that are being explored to
selectively reduce fat mass rather
than muscle mass.

We have already highlighted Rivus is in Phase 2 studies for obesity and Versanis is developing Bimagrumab and
Amgen’s GIP antagonism approach – other CV indications with drugs that we is in Phase 2b studies with this long-
which does not necessarily induce believe are mitochondrial uncouplers. acting drug. Bimagrumab is a
appetite suppression but instead Company raised a $132mm Series B monoclonal antibody that blocks ActRII
inhibits the storage of glucose in financing in 2022 led by RA Capital. The signaling in adipose cells, mobilizing
adipocytes by reducing insulin company reported Phase 2a data at and metabolizing fat.
levels. AASLD in Nov 2022 that its drug was Activin signaling via ActRII receptors
highly selective for reduction of fat over directly promotes lipid storage, acting
Rivus is focused on increasing the muscle mass. The company’s approach is as a key driver of visceral fat
inefficiency of cellular metabolism, based on an idea dating back to the accumulation and obesity. Bimagrumab
thereby causing more fat to be 1930s and has very high market potential decreases body fat, especially
burned. if its can demonstrated an acceptable abdominal visceral fat, while at the
safety profile. Currently, the lead study same time increasing muscle mass.
Versanis is blocking an adipocyte underway is for heart failure management Since initial development, bimagrumab
receptor whose signalling is in persons with obesity. This is protected has been administered to more than
required to store fat. by a newly filed patent. 1,000 patients for up to 18 months
across more than 20 clinical studies.

55
 Rivus is Pursing the “Original Idea” in Weight Management:
Mitocondrial Uncoupling
Tainter, Stockton & Cutting, JAMA, 1933 American Journal of Public Health, 1934 In 1918 an industrial worker exposed to a dye called
dinitrophenol passed away after experiencing severe
“We have recently suggested that alpha- weight loss.1 Researchers at Stanford led by Professor
dinitrophenol (1-2-4) might have therapeutic Tainter sought to understand how this dye caused
value in conditions in which an increased such dramatic weight loss and published the papers
metabolic rate would be beneficial. Study of its shown at left. This was the original approach to
pharmacologic properties shows that it has the obesity therapeutics – coming far earlier than the
notions pursued today.
power to increase metabolism to very high
levels without causing important damage to
Ultimately, dinitrophenol was determined to be
vital organs and functions. Serious harm is
unsafe but was briefly used with great effect to treat
apparently only caused by the drug in large
obesity at a Stanford clinic. These drugs have the
doses which produce too great metabolic function of increasing the speed of mitochondrial
stimulation, with resulting fever. In low, or energy consumption through what is known as
therapeutic, doses, the metabolism may be mitochondrial uncoupling.
increased 50 per cent or more over considerable
periods of time without unpleasant symptoms This led Allen Cunningham and colleagues to form a
or toxicity. Such an action is useful in treating company called Gencia in 2002 which focused on
obesity, since the increased metabolism results developing safer mitochondrial uncouplers,
in loss of weight, just as it does with thyroid eventually leading to a collaboration with Takeda.2
medication. This paper is in the nature of a
progress report on results obtained to date of When Takeda exited cardiometabolic disease, Rivus
treating 113 consecutive cases of obesity was formed and is now in Phase 2b with a study in
observed in clinic and private practice.” obese individuals with heart failure.3

Sources: https://jamanetwork.com/journals/jama/article-abstract/245872, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1558869/

1. Warthin, A. S. "A fatal case of toxic jaundice caused by dinitrophenol." Bull Int Assoc Med Mus 7 (1918): 123-126. 2 https://www.fiercebiotech.com/partnering/takeda-bets-500m-on-a-freshly-unstealthed-biotech, 3 56
https://biobuzz.io/rivus-pharma-obesity-therapy/
 Rivus Approach: Promising Data

57
Versanis Slides at ADA

As one might expect Versanis emphasized the importance of combining appetite suppression
medications with other approaches in its presentation at ADA. They introduced the idea of weight
loss quality by comparing fat mass loss to total body weight loss from various studies.

Source: Presentation slides from the 83rd Scientific Sessions of the American Diabetes Association, June 2023. 58
#6: Longer Acting Therapies Desirable

Global Data, “Unmet needs in the obesity market,” April 13, 2023

A key priority is to
One such need in the obesity space is for longer-acting therapies. create options that
Despite the anticipated arrival of novel therapies to treat obesity in the require less frequent
administration –
next ten years, GlobalData forecasts that major opportunities will remain
particularly for
for pharmaceutical companies to develop drugs for obesity that are injectable drugs.
longer acting. KOLs interviewed by GlobalData highlighted the need to
develop therapies with lower frequencies of administration, as therapies We are aware of two
with the lowest frequency of administration in the obesity space still promising long-acting
agents: Amgen’s
require administration on a weekly basis. Furthermore, GlobalData’s
AMG133 involves
primary research revealed that many people are not keen on or will not monthly dosing and
be able to tolerate receiving a weekly injection. Versanis’ Bimagrumab
involves quarterly
dosing.
Source: https://www.pharmaceutical-technology.com/comment/unmet-needs-obesity-market/
59
#7: Drugs that Do Not Need Specialists

Global Data, “Unmet needs in the obesity market,” April 13, 2023

There is a substantial lack of

“Another significant unmet need in the obesity market is the availability medical infrastructure to
and accessibility of specialists. This is an important obstacle that needs treat the obese population
in the United States. This is
to be overcome to optimise coverage for obesity. Factors that can
particularly true because
negatively influence access to specialists include the lack of access to and obesity is endemic in less
fragmentation of weight management services, associated costs, lack of well-off populations.
time, and the stigma that surrounds obesity. KOLs highlighted that health
inequality has a massive impact on obesity and that clinical trials, Opportunities to reach
populations out of reach of
therefore, do not accurately reflect the obese population, particularly
specialists include
patients who are more socially deprived or patients from different distribution via the OTC
socioeconomic backgrounds.” channel and the e-
Prescribing channel.

Source: https://www.pharmaceutical-technology.com/comment/unmet-needs-obesity-market/
60
Big Unmet Need for Obesity Drugs Among Poor and
Those with Less Education
Lyu B, Chang AR, Inker LA, Selvin E, Grams ME, Shin JI. Socioeconomic status and use of obesogenic and anti-obesity
medications in the United States: A population-based study. Lancet Reg Health Am. 2022 Jul;11:100249.

Obesity Most Prevalent in Lower Social Economic Status … Yet those populations are least likely to use anti-obesity
(SES) Populations… medications.

Source: https://pubmed.ncbi.nlm.nih.gov/35928911/
61
An Interesting Affordable Option: Plenity®

Source: https://ir.gelesis.com/ 62
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

Obesity Drug Pipeline: Other Biotech Companies to Watch

63
Obesity Drug Pipeline

Novel Incretins
GIPr inhibitor GPR40, GPR119 SSTR5
Ligand inhibitor

Gut blocker
Mucin enhancer
ZP 8396 PON2

Cagrisema
GLP-1Agonist Survodutide
Glucocorticoid
Mazdutide receptor

Pemvidutide Mitochondrial

Consumer Focus
& microbiome
GLP-1, GIP Agonist Dual lipase, a-gluc

GLP-1, GIP Agonist Microbiome

Retatrutide Approved
GLP-1, GIP Agonist
Orforglipron CB1 Microbiome
GDF15
ActRIIr Blocker TASR2
Neural
Phase 2 and Phase 3

Vascular Disruption
MOGAT2
GPR75
Phase 1 and Preclinical

64
 Emerging Gut Restricted Approaches
We are aware of at least three
companies that use gut-
restricted approaches to
manage obesity.

Aardvark’s drug stimulates ARD-101 is a gut restricted drug that APH-012 is a bead formulation of Glyscend attempts to block the
release of a number of gut conveys systemic effects via activation glucose that releases glucose in activity of incretins from the gut in
peptides. of gut peptide hormone secretion, the gut. This induces the release of order to impact obesity. The
including GLP-1, GLP-2, and the full spectrum of enteral company’s Mucus Complexing
Aphaia is trying to accelerate cholecystokinin (CCK). CCK has long hormones that control appetite, Polymer (MCP) platform invented
the release of “good” been recognized as an interesting hunger, satiety, glucose through research originating at
hormones from enteric cells pharmaceutical target because metabolism, and other Johns Hopkins University. Glyscend is
by bathing them in local its release is triggered with homeostatic functions. Aphaia ingeniously targeting mechanisms
glucose. food and helps suppress feelings of showed this in a Phase 1 study. In inside the GI tract to treat a variety
hunger. ARD-101 stimulates the Q1 2024, Aphaia will have weight of metabolic and chronic conditions.
In contrast, Glyscend uses a
release of the body's natural CCK, but loss data that will allow one to Glyscend presented data at ADA
barrier approach which
primarily targets vagal nerve evaluate whether this approach is showing that its drug was successful
attempts to shield food from
the gut’s incretin receptors. afferents located near the gut - in competitive in the emerging in reducing body weight and
The goal is to mimic the turn induces positive effects on market. One major benefit of the postprandial glucose.* These data
beneficial effect of Roux-en-Y hunger, metabolism, and approach may be less nausea side were from a 14-day study, so it is
gastric surgery using a pill. inflammation through gut-brain effects associated with other hard yet to interpret and compare to
signaling. Has Phase 1b data. approaches. other agents.

* See https://www.businesswire.com/news/home/20230531005626/en/Glyscend-Therapeutics-Announces-Positive-Topline-Phase-2a-Clinical-Results-and-Progress-with-GLY-
200-a-First-in-Class-Treatment-for-Type-2-Diabetes-and-Obesity 65
Other Emerging Approaches to Watch

We are struck by the

richness, diversity and
ingenuity of the XEN-101 is a microbiome
Arrowhead is in Phase 1 EMP16 combines Eracal studied targets
current obesity treatment for obesity
with Adipotide®, a acarbose, a carbohydrate that impact weight in
pipeline. We believe planned to be evaluated in
peptide that targets a metabolizer with orlistat, Zebrafish. They are in
that there will be a a Phase I clinical trial. XEN-
protein on the surface of a well-known lipase preclinical studies of a
range of exciting 101 is a first-in-class oral
blood vessels supporting inhibitor. EMP16 has program called ERA-
options for managing formulation, engineered to
white adipose tissue. The shown promising efficacy 379 based on this work
excess weight in the produce weight loss by
effect is to eliminate cells in a 6-month clinical that works by
decade ahead. mimicking the microbiome
by disrupting blood trial and has a fully disrupting neural
supply. Treatment with enrolled Phase 3 study circuits for hunger. changes induced by
adipotide induced underway. This drug may MOA not disclosed. gastric bypass surgery.
targeted apoptosis within be a candidate for direct- Eracal has recently XEN-101 has demonstrated
blood vessels of white to-consumer and/or OTC entered into a profound weight loss
adipose tissue and models given the known collaboration with effects in animal models
resulted in rapid weight safety of its elements. Nestlé Health Science. and humans with limited
loss and improved insulin side effects.
resistance in obese
monkeys.

66
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

The Consumerization of Obesity Treatments

67
A New Class of ‘Game-Changer’ Weight-
Loss Drugs Exploded in Popularity in 2022
Gabby Landsverk, Business Insider, November 25, 2022

“A new category of weight loss medications,

repurposed from diabetes treatment, are seriously
changing how we think about and approach
weight management.

In 2021 the medication semaglutide, called a

"game changer" in the industry, officially got the
FDA's approval to be prescribed for weight loss. In
2022, it has soared in popularity, becoming more
widely used and spurring more research. In the
past year, another promising drug has also been
eyed for approval as a weight loss treatment.”

Source: https://money.yahoo.com/class-game-changer-weight-loss-170000151.html 68
 Recent Harris/Stat Poll Shows Broad Familiarity with
GLP-1 Drugs

Nearly half of
Americans are
aware of the new
generation of
weight loss
drugs and are
interested in
using them.
Interest in these
products is off
the charts.

Source: https://www.statnews.com/wp-content/uploads/2023/06/STAT-Harris-Poll_Obeisity-and-Weight-Loss-MedsSent_21Jun2023-1-1.pdf
69
Google Search Volume for Ozempic Up 20X in Two
Years (3X in the Last Six Months)
Google Searches for Ozempic (Peak Volume = 100), March 2021 to June 30, 2023
100

90

80

70

60

50

40

30

20

10

70
Same Phenomenon Underway on TikTok

Source: https://www.cnn.com/2023/03/17/health/ozempic-shortage-tiktok-telehealth/index.html
71
Patrick Wingrove, Reuters, June 27, 2023
Most American’s get health
“Until late last year when Wegovy prescriptions began to rise, insurance through
weight-loss coverage represented a marginal expense for employers employers. Most employers
because the available branded drugs were ineffective and little used, self-insure.
or readily substituted by cheaper generics, the healthcare consultants
said. As noted at left, employers
are struggling with the cost
Employers also were supportive of treatments that could help reduce of the high volume of
the risk of diseases that are exacerbated by excess weight including prescriptions for Wegovy®
heart conditions and diabetes. and Mounjaro® coming
through in 2023.
The arrival to market of Wegovy in 2021 and in 2022 Mounjaro, a
similar diabetes treatment from Eli Lilly that is being prescribed off-
label but is not yet approved for weight loss, have changed that
dynamic.”
Source: https://www.reuters.com/business/healthcare-pharmaceuticals/obesity-drug-wegovys-popularity-has-us-employers-rethinking-insurance-coverage-2023-06-27/
72
The Patient Isn’t Waiting
for Health Plans and
Medicare to Cover their
Obesity Drugs
Due to a lack of long-term data on
outcomes, many plans exclude weight loss
medicines from coverage or relegate them
to higher tiers on formularies.

According to AHRQ, 68% of U.S.

expenditures for weight loss medicines are
out-of-pocket.

These are relatively old data.

Source: https://www.gao.gov/products/gao-19-577
73
Onilne Advertising for GLP-1 Medications Ozempic®
and Wegovy® Online Far Outpaces Viagra®
NBC News, “More than 4,000 ads for Ozempic-style drugs found running on
Instagram and Facebook,” June 15, 2023

The current
Online pharmacies, medical spas and diet clinics are running thousands of weight-loss ads
interest in obesity
on social media for the drugs Ozempic and Wegovy or for their active ingredient,
capitalizing on a surge of interest in the medications but also angering some consumers
drugs is very high.
who say they’re being inundated with ads suggesting they could benefit from the drug.
There is five times
On Facebook and Instagram alone, there were more than 4,000 active ad campaigns in the more advertising
U.S. mentioning semaglutide, the drugs’ active ingredient, according to multiple searches for Semaglutide
over several days on the ad library of the apps’ parent company, Meta. today than for
Viagra®.
By that measure, semaglutide is more heavily marketed on social media than even the
erectile-dysfunction drug Viagra, which was mentioned in 800 active ad campaigns on
Instagram and 930 campaigns on Facebook as of Monday and has long been known to be a
favorite subject of online marketers. Meta does not provide spending amounts for such ad
campaigns.

Source: https://www.nbcnews.com/tech/internet/ozempic-weight-loss-drug-ads-instagram-wegovy-semaglutide-rcna88602 74
Obesity Drugs Consumerization Trend
Overwhelmingly, news stories about the popularity of Ozempic®, A vendor or two who sells an unsafe compounded product. But it’s also
Wegovy® and Mounjaro® have highlighted the risks of direct consumer worth noting that both Meta and Google police advertisers on their
access. sites heavily.

A number of groups have noted that current shortages of Semaglutide If 2021 was the year in which the world began to use telehealth, 2023 is
mean that those with the highest need, diabetics, may be getting the year when American’s are learning to use e-Prescribing. It’s no
crowded out by image conscious consumers who do not have the same longer about ED drugs or baldness medications. Ozempic® is a
medical need. There is particular concern with the shift of consumers to valuable drug to forestall chronic disease.
online web sites where product can be dispensed rapidly using e-
prescribing. The widespread use of e-Prescribing websites to access obesity
medications is a major phenomenon and, if appropriately leveraged, a
We wish to note that even if prescribed online, a physician is still involved. very positive one for the pharma industry. More Americans can gain
Further, online sites are giving a much broader part of the U.S. population access to needed drugs. More Americans are taking charge of their
access to these drugs as a very large percent of the population does not health online. And there is an opportunity for pharma to reach the
regularly see doctors. patient directly.

Further, while both the FDA and Novo Nordisk have been talking about If you will, we think a long-term trend is well underway: the
the risks associated with online access of compounded Semaglutide we consumerization of access to pharmaceutical products. It’s important as
are not aware of negative health reports of such access. Compounded well because private pay drugs accessed online are often less expensive
product is available at much lower prices (but only while the product is on for the consumer than the co-pay on drugs paid for by insurance.
the FDA shortage list) and is allowing a much broader part of the U.S.
population access to GLP-1 agonists. Compounding is a routine part of When we look back in a decade, we believe that the early 2020’s will
our system. We do not doubt, of course, that there are some abuses and have proven to be a watershed moment when patients learned to take
risks. A thin person who uses Ozempic® to get even thinner. Not unlike real action that could forestall chronic disease by going online. Far from
the 22-year-old man who gets Viagra®. a problem, we see a major opportunity for pharma.

75
 Alexandria Center for Life Sciences, South San Francisco, CA. Source: Stifel

How Big is the Obesity Market?

76
Today’s Estimates of Market Size Likely Underestimate
the Ultimate Spend on Obesity Drugs
Private research firm and brokerage house consensus For those hoping to find an official Stifel estimate of peak sales for
peak sales for the GLP-1 class is around $30 billion but obesity drugs in this section, you will be disappointed. We are not
there are estimates that run as high as $100 billion. prepared to make such a forecast.

In this section we ask “what is a reasonable estimate But we wish to make several points:
of peak sales given the enormous unmet need and 1. It is very difficult to predict the total market size because we not yet
consumer interest in these products?” seen long-term outcomes data yet from companies like Novo for
Semaglutide or Lilly for Tirzepatide.

Allison Gatlin, Investors Business Daily, Dec 8, 2022 2. Further, there are so many new agents in development that have
potential to satisfy unmet needs in the market that it is quite
challenging to predict how the market might evolve. It is particularly
“Market researchers with Reports and Data
striking to us to review market forecasts from, say 2019, and to see
estimate the market was worth $8.39 billion in 2020 how wrong they were. The market changed radically afterwards.
and will grow to $28.1 billion by 2028. Grand View
3. The U.S. insured market potential is very likelyi in excess of the $100
Research expects the market to hit $15.6 billion by billion that has been described in some brokerage reports.
2024. Yet another analysis group, Research and
4. The consumer end market demand is similarly large. That is, if
Markets, pegs the obesity treatment market at insurers (ultimately, governments and employers) don’t want to pay
$25.3 billion by 2027.” for the demand, consumers are willing to pay themselves.

Source: https://www.investors.com/news/technology/amgen-stock-here-is-what-we-know-about-its-belated-obesity-treatment/
77
 Why is the Market Opportunity So Large?
1 Chronic treatment. Obesity drugs will be needed over a long 4 Obesity Not Going Away. Regrettably, the harmful “Western
period of time. We have reviewed approved drugs and those Diet” is spreading. KFC is branching across China and
in the pipeline. Except for bariatric surgery, there are no McDonald’s is well on its way to full globalization.
solutions available to patients that do not involve long-term
administration of products. Perhaps one day, such a drug will 5 Multiple Needs / Niches in the Market. The market will
be developed but today we do not see one in the pipeline. have a diverse set of players offering products with different
labels and price points. Some drugs will be for the “post-
2 Pays for Payors. Payors will ultimately make money by GLP-1 period” to avoid rebound and will be inexpensive,
covering obesity drugs. It appears highly likely that the data reasonably effective and safe.* Other drugs could be a bit
will show massive reductions in chronic disease outcomes less safe and will be available to those who medically need to
from patients who stay on incretin-based drugs over the long drop substantial weight. Other drugs will have labels that
run. Because obesity-linked chronic diseases are the #1 encompass chronic conditions like NASH or heart failure.
source of cost in the U.S. healthcare system, it is likely that a Even addiction or Alzheimer’s might be possible indications.
long-term study will show the benefit to payors for covering
the drugs. 6 Definition of “Obesity” Will Broaden. The relevant market
will grow. For example, we are shifting from notions of
3 Aesthetic Driver Powerful. The societal demand for obesity avoidance of too high cholesterol today to managing
reduction is driven by a desire to look thin. Forty percent of patients to “optimal cholesterol.” The same can be true with
American’s are obese and almost all of them would pay weight. There are also subpopulations of persons with
money to look thinner. This source of demand is driving the normal BMI who have heightened cardiometabolic risk – the
market to a private pay approach. so-called “skinny fat.” (see, for example,
https://jcto.weill.cornell.edu/news/skinny-fat).

* Gelesis’ Plenity product comes to mind. It fills your stomach with cellulose, is inexpensive, can be OTC and is reasonably effective. 78
 Why The U.S. Government and Insurers Will Ultimately Agree
to Cover Obesity Drugs: Obesity Costs are a Huge Societal
Burden

“Approximately 1 in 4 women and 1 in 8 men gain 44 pounds or more between the ages of 18 and 55 years. New research
suggests that preventing excessive weight gain during this period may be a promising target for intervention. Weight gain
≥ 44 pounds during early to middle adulthood significantly increases chronic disease risk”

Source: https://stop.publichealth.gwu.edu/fast-facts/obesity-related-chronic-disease

79
Novo Nordisk Chart on Obesity Comorbidities

Source: https://www.novonordisk.com/content/dam/nncorp/global/en/investors/pdfs/ada/ada-investor-presentation-2023.pdf 80
A Quantitative Look at Payor Cost Savings

Assumed Payor Cost of Ozempic® with Rebates/Discounts/Coupons: $6,000

AAF Annual Direct Costs of Chronic Disease in the U.S.: $904,800,000,000

AAF Annual Total Costs of Chronic Disease in the U.S.: $3,700,000,000,000

AAF Annual Total Per Person with Chronic Disease: $28,030

What Percent of Chronic Disease Costs Would Need to be Avoided to Break Even
on Paying for “GLP-1’s for Life” for Persons at Risk of Chronic Disease Due to 21.4%
Obesity?

Assuming a $6000 a year cost and the above estimates of the costs of chronic disease, a payor who bears those costs such as
the U.S. government would want to see evidence that the use of GLP-1’s for life would reduce chronic diseases costs by 21.4%
to break even.

Source: https://www.americanactionforum.org/research/chronic-disease-in-the-united-states-a-worsening-health-and-economic-crisis/ 81
 Lilly Q1 2023 Investor Presentation: Ongoing Marketing
Studies of Tirzepatide

These two giant studies are the

right ones for Lilly to run. By
showing the effect of Tirzepatide
use on mortality and chronic
health cost outcomes in persons
with both obesity and Type 2
diabetes, Lilly should be able to
remove any doubt that GLP-1
agonists are highly beneficial for
society from both an outcomes
and costs perspective. Importantly,
the second study will be
completed by the end of 2024
which means broad
reimbursement for Tirzepatide
could be in place by 2025.

Source: https://investor.lilly.com/static-files/76c6788c-ea65-4c9f-9a57-e8bceb2fa290 82
Novo Nordisk Outcomes Trials for CagriSema
Novo’s strategy is a little different than
Lilly’s. They are running a smaller
outcomes trial (4,000 subjects vs. 28,000)
that will be event driven. Their study will
have 65% T2D patients. They are also
running a head-to-head study of Cagri
against tirzepatide.

It’s interesting to see that Novo is doing

their big trial with CagriSema® rather
than Semaglutide.

We are struck by the comparison of

Merck and BMS in the checkpoint field.
Merck, in part, ended up with higher
share, by outspending BMS on clinical
studies – building a broader label.
Depending on how these studies pan
out, Lilly may do something similar.

The need for these large outcome studies

is going to be important for emerging
contestants such as Amgen, Carmot,
Source: https://www.novonordisk.com/content/dam/nncorp/global/en/investors/pdfs/ada/ada-investor-presentation-2023.pdf
Viking and Sun.
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So Just How Big is the Potential Insured Market?
It’s possible to defend insured market size estimates of $50 billion to $200 billion. It all depends on how many
individuals go on the drugs. The history of statin usage would support numbers at the high end of this range.

Prevalence of Obesity in the United States: 41.9% (CDC). Comparison Point: Fewer Americans have high cholesterol than obesity
(around 30%). Approximately 39 million Americans use statins (over 18% of
Number of persons in the U.S.: 332 million (US Census) the total adult population). Roughly 50% of Americans with atherosclerosis
take a statin every day.
Number of obese persons in the U.S.: 139 million

Market Sizing:

10% of U.S. obese persons (4% of population) on GLP-1s @$5000 a

year: $69.5 billion

20% of U.S. obese persons (8% of population) on GLP-1s @$5000 a

year: $139 billion

30% of U.S. obese persons (12% of population) on GLP-1s @$5000 a

year: $208.5 billion

The actual total addressable market (TAM) for a U.S. obesity drug at
$5k/year in the U.S. is a mind-boggling $695 billion. That’s close to
the entire Medicare budget.
Sources: https://www.cdc.gov/obesity/data/prevalence-maps.html, https://www.cdc.gov/nchs/products/databriefs/db177.htm, 84
https://www.uspharmacist.com/article/hypercholesterolemia-trends
 But the Real Argument for Market Size is the Consumer
We believe that the consumerization of obesity products will be the main driver of obesity market size in the next three to
five years – not insurer behavior.

Americans are willing to

spend a fair bit on obesity
drugs out of their own
pocket.

The survey at left reported

by Stat+ on June 21 shows
the percent that would be
willing to spend money on
GLP-1’s without insurance
coverage.

Source: https://www.statnews.com/wp-content/uploads/2023/06/STAT-Harris-Poll_Obeisity-and-Weight-Loss-MedsSent_21Jun2023-1-1.pdf
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So Just How Big is the Potential Private Pay Market?
It’s possible to defend private pay U.S. market size estimates of $70 billion to $200 billion. This is quite unusual as
most private pay markets for “consumer-friendly” type drugs such as Viagra® are much smaller.

We use the price range midpoints

Prevalence of Obesity in the United States: 41.9% (CDC). from the Stat/Harris poll in the
analysis at left and estimate the
Number of adults in the U.S.: 258 million (US Census) implied market size from the number
of persons interested in obesity
Number of obese adults in the U.S.: 108 million drugs at each price point.

Importantly, the consumer market is

Total Market Sizing: less dependent on outcomes data
and more dependent on strength of
Monthly Price Point of $1000: 5% of 108mm people @$12,000 annually = $154.8 billion the drug and perceived safety and
ease of use.
Monthly Price Point of $500: 11% of 108mm people @$9000 annually = $170.3 billion
Consumers obviously would prefer
Monthly Price Point of $375: 17% of 108mm people @$4500 annually = $197.4 billion orals and a lower price point, if
possible.
Monthly Price Point of $175: 23% of 108mm people @$2100 annually = $124.6 billion
A large fraction of Americans already
Monthly Price Point of $50: 44% of 108mm people @$600 annually = $68.1 billion spend over $1,000 a year on iPhones.
Perhaps they would do the same to
stay slim.
Sources: https://www.cdc.gov/obesity/data/prevalence-maps.html, https://www.cdc.gov/nchs/products/databriefs/db177.htm, 86
https://www.uspharmacist.com/article/hypercholesterolemia-trends
The iPhone Market Analogue
Is it possible to have a $100 billion+ consumer product? Consumers must really want a product and be willing to
pay for it. Worldwide iPhone sales last year were $205 billion (about 40% was the U.S.). Given the consumer mania
for obesity drugs we see no particular reason why drug revenue with this order of magnitude is unachievable.

Source: Apple earnings report, 2022, https://www.apple.com/newsroom/2022/10/apple-reports-fourth-quarter-results/ Photo from Apple web site.
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