By Maximilian-Benedikt Köhn, Analyst and Fund Manager at DJE Kapital AG

A widespread disease from an investor's perspective

Obesity is on the rise worldwide and literally a burden not only for those affected. It is also a burden on the healthcare and social systems of national economies. Several promising new drugs are currently in trials or have already been approved and could make expensive stomach reductions obsolete. Companies behind these potential blockbusters of tomorrow are worth a closer look, as are Covid-19 vaccine makers, as the virus puts obesity sufferers at a significantly greater risk.

Obesity - An interesting and growing health care market

Currently, there are over 764 million obese people worldwide, defined as having a body mass index (BMI) over 30. BMI is calculated by dividing a person's weight by their height in meters squared. By 2030, more than one billion people worldwide are expected to suffer from obesity. Obesity leads to considerable subjective suffering for those affected, but is above all associated with multiple secondary diseases. Nevertheless, only about 2% of all people affected worldwide are currently receiving medical treatment. Accordingly, the field of obesity has hardly been tapped to date and is a distinct growth market.

Wegovy - a promising drug

Although surgical stomach reductions for the treatment of obesity have been successful and are becoming increasingly established, they represent an invasive procedure that is non-reversible and entails lifelong monitoring. For this reason, drug treatment strategies were sought early on, but even when successful, they were often discontinued or even withdrawn from the market altogether because of their side effects.

So far, only drugs from the field of diabetology, so-called GLP-1 receptor agonists, have prevailed. As a further development of the proven but only moderately effective active ingredient liraglutide, there is now high-dose semaglutide (under the product name Wegovy) available from Novo Nordisk. Semaglutide in lower doses under the product name Ozempic has been proven worldwide for years in diabetology and is safe to use. Wegovy has been able to demonstrate weight reductions of over 15 percent in major studies and is already officially approved in the USA as a pure weight loss drug. Demand for Wegovy is so high that Novo Nordisk cannot keep up with production. As a result, the lower-dose Ozempic is currently being used in part (as an off-label use) in obesity treatment here.

New promising drug Mounjaro from Eli Lilly with blockbuster potential

The active ingredient tirzepatide, known as Twinkretin, from the U.S. pharmaceutical company Eli Lilly is a further development in diabetology, as it addresses GIP receptors in addition to GLP-1 receptors.

The effects on blood glucose shown in studies exceeded those of pure GLP-1 receptor agonists. And the weight reductions were also impressive: with up to 22.5 percent weight loss, this substance not only outperforms all previously known drugs, but for the first time as a drug approaches a sound barrier that was previously only known from gastric reduction.

In Europe, Eli Lilly expects approval by the end of the year, and from 2023 the injection with the active ingredient tirzepatide could also be available in this country for diabetes (type 2) on prescription under the product name Mounjaro. In the USA, the drug has already been on the market for several months.

Tirzepatide is therefore considered one of the most promising new developments of recent years with high blockbuster potential. The outcome studies in diabetology, the actual tolerability and effect under "real-life" conditions remain to be seen. It will then be exciting to see whether tirzepatide will also be approved on its own for the treatment of obesity. A decision is expected here in 2023.

A win-win situation for sufferers and health care providers

The global negative economic impact of obesity is estimated at approximately three percent of global GDP. The direct and indirect costs of obesity are thus estimated to exceed USD 900 billion annually.

This puts all the more pressure not only on health care providers but also on those affected to reduce these costs. Drugs should only be used if no or insufficient weight loss is achieved through lifestyle changes. In the face of unsuccessful therapy, surgical stomach reduction ist he last resort. In this case, the volume of the stomach is reduced and body weight reductions of around 25-30 percent are the result. But the cost of this is high: In the United States, the cost of a stomach reduction is about 25,000 to 35,000 USD. In Germany, such an operation costs between 8,000 and 15,000 euros.

This makes the new potential drugs all the more exciting. Wegovy from Novo Nordisk is already approved in the U.S. for the treatment of obesity and costs slightly more than USD 1,000 per year - mind you, with a possible weight reduction of more than 15 percent. Eli Lilly's new drug, with more than 20 percent weight reduction, will likely be priced similarly, so many government payers may prefer the simpler, cheaper option of drug treatment over stomach reduction.

High market penetration only with sufficient clinical data

With drug treatment of only ten percent of the world's more than 750 million obese people at an annual cost of $1,000 per year for Wegovy or Mounjaro, the market would be more than $70 billion: a market with enough room for two large pharmaceutical companies. However, the prerequisites are positive study results, proof of tolerability and, above all, a decision by the payers to include the above-mentioned drugs in the reimbursement obligation for a given indication. The necessity for this is given. Numerous secondary diseases of obesity are known (and cost-intensive), such as pre-diabetes, diabetes Mell. Type 2, hypertension, cardiovascular disease, obstructive sleep apnea, liver changes, etc. For good reason, the WHO has officially classified obesity as a disease and not just an impairment.

Covid-19 and obesity: higher risk of hospitalization

Attention should also be paid to the relationship between Covid-19 and obesity, as the latter appears to favor a severe course of Covid-19. According to the German Obesity Society and studies from Oxford University, people with obesity have a twofold increased risk of hospitalization in the event of Covid-19 disease. Rapid booster vaccinations are therefore important for people with severe obesity to protect against a severe course and help prevent deaths. Thus, along with cardiovascular disease and diabetes, severe obesity is among the most common risk factors for a severe course of Covid-19, which is particularly relevant during the current Corona summer wave and is likely to become even more important with the fall wave that may be coming.

This will make the trial data from BioNTech/Pfizer or Moderna on the modified vaccines in the fall all the more important, as it will likely make renewed booster vaccination a reasonable option to provide better protection for the potential fall wave. BioNTech/Pfizer and Moderna remain the technology leaders in 2023.


Globally, studies predict obesity-related diseases will increase to about 1 billion people. The number of diabetics (type 1 and 2) is expected to increase to 587 million people over the same period. Pharmaceutical companies focusing on therapies for diabetes and obesity thus remain interesting. The year 2023 will be particularly exciting for Novo Nordisk and Eli Lilly. Novo Nordisk should have its in-house supply chain issues with Wegovy under control by then, and Eli Lilly could penetrate the market with rapid volume growth. Both short-term (fall wave) and long-term (mRNA technology in other indications) therapeutic opportunities will matter to mRNA technology companies - because (not only) Covid-19 will unfortunately continue to accompany us in 2023.


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