Zepbound. Wegovy. Ozempic. Mounjaro. These GLP-1 drugs, originally used to manage diabetes, are now gaining popularity as weight loss drugs.
Recently, these drugs were discovered to be effective in treating obesity. Since then, their demand has skyrocketed.
And private investors are noticing this.
As the market for these GLP-1s increases, investors are keen to make the most of it.
Does this mean GLP-1s are the next big investment opportunity in pharma? Will private investors entering the market benefit the patients?
Let’s find out!
GLP-1s and obesity
Obesity is currently a global epidemic, with almost 1 billion people all over the world living with it.
Obesity brings with it a host of other issues, including cardiovascular diseases, respiratory problems, diabetes, and hypertension. Part of it is due to unhealthy eating habits, increased stress in our day-to-day lives, and sedentary lifestyles.
While lifestyle changes are essential to fight obesity, GLP-1 drugs can further aid in controlling this epidemic.
Originally used to manage diabetes, scientists have now found that these drugs can also help treat obesity—even the FDA-approved GLP-1 drugs for weight loss.
What are GLP-1 drugs?
Glucagon-like peptide (GLP-1) is a natural hormone produced in the gut which regulates blood sugar and appetite.
GLP-1s or GLP-1 agonists are synthetic drugs that mimic the effects of GLP-1 in the body. They are used to lower blood sugar levels in people with type 2 diabetes.
GLP-1s is usually available as injectable medication administered in the fatty tissues under the skin, such as the thighs, upper buttocks, and belly.
These medications are relatively new; scientists are still studying them for potential benefits and risks.
How do GLP-1s work?
GLP-1s works by mimicking the GLP-1 hormone released in the small intestine. It has several important functions in the body, such as:
- Triggering insulin release from the pancreas: Insulin is essential for regulating blood glucose levels in the body. Impaired production of this hormone can cause diabetes.
- Preventing glucagon secretion: Glucagon is antagonistic to insulin and raises blood glucose levels. GLP-1 blocks the release of glucagon and prevents glucose from reaching the bloodstream.
- Slows down digestion: GLP-1 promotes slower digestion, preventing a sudden spike in blood glucose levels. Therefore, it keeps you feeling full for longer.
GLP-1 drugs produce the same effect in the body as the GLP-1 hormone. They trigger the pancreas to release insulin and slow digestion. Thus keeping blood glucose levels in check.
Since it helps feel full for longer durations, GLP-1 agonists can reduce food intake and cravings, thus helping in weight loss.
As the usage of GLP-1 climbs, two distinct care models are emerging: the prescription-only model and the prescription-with-lifestyle intervention model.
The prescription-only model is not a very good approach to treating obesity since it depends only on the medication to lose weight. A medication-cum-lifestyle change is usually far more effective.
GLP-1s market outlook
Global GLP-1 sales are projected to reach $150 billion by 2032, registering a CAGR of 15.8% over 2023–2032. This demand is fuelled by the rising prevalence of diabetes and obesity, owing to modern diet and lifestyle.
Such exploding demand and off-label use of these drugs are resulting in supply shortages.
According to a JP Morgan study, only 10-12% of type-2 diabetes patients currently use GLP-1 drugs. This number is likely to increase over the next decade.
Around 15 million obese patients are estimated to be on GLP-1s in the next 10 years. The report says nearly 30 million people will be on GLP-1s by 2030, in the US alone.
Private Equity’s Role in GLP-1 Market: Challenges and Opportunities
The FDA approved Novo Nordisk’s Wegovy and Eli Liliy’s Zepbound for chronic weight management. While more research is needed to understand the possible side effects of this group of drugs, the future looks promising, and private equity funds are taking notice.
Success in the GLP-1 market depends on operational excellence and market outreach.
Currently, patients are facing challenges such as a shortage of the GLP-1 drug, long wait times, and unresponsive clinicians.
Private investors can transform these challenges by:
- Providing the capital to source staff and appropriate medical personnel. This will lead to better patient handling and shorter wait times.
- Offering premium services like at-home tests free of cost to stand out against competitors. Private investors can also help tackle insurance complexities as more and more companies start covering GLP-1 weight loss drugs.
- Investing in organic marketing strategies targeting ideal consumers: Organic marketing strategies, building customer trust, and offering exceptional services will help private investors succeed in the growing GLP-1 market.
- They can also aid in advancing research and development of these drugs. While the drugs are currently available in injectable form only, further research can enable oral alternatives. This will lead to patient convenience and increased medical adherence. Oral medications will also increase the manufacturing capacity of drugs and ensure they meet the rising demand.
Bottomline
The market for GLP-1 drugs has boomed in the past couple of years and will continue to boom for the next decade.
Private investors can completely transform this market since they already play a significant role in transforming the healthcare landscape everywhere.
So, GLP-1s can be the next big bet in the pharma space. What are your thoughts?
By Rohini Kundu and the AHT Team
