Oppenheimer points to the next "hot spot" for weight loss drugs: over-the-counter oral medications.
1min read Intellidex learned that the race to develop oral weight loss drugs is heating up. The popular GLP-1 injectable weight loss drug makers "duopoly" Eli Lilly(LLYUS) and Novo Nordisk(NVO.US) as well as potential new entrants Pfizer(PFE.US) and Roche are all in the race. As injectables have drawbacks, oral GLP-1 drugs have become a hot target in the anti-obesity field. However, Oppenheimer sees further, the agency in a Wednesday research note saying that a shift to the over-the-counter (OTC) field would be an additional advantage.
Oppenheimer analyst Jay Olson said: "In the competitive obesity space, Rx-to-OTC conversion may be a highly differentiated, valuable lifecycle management strategy that protects a significant brand asset after patent expiration."
Prior to his remarks, Danish drugmaker Novo Nordisk said on Friday that its cannabis receptor-targeting weight loss pill in a mid-stage study raised concerns about neurological side effects, sending the company's stock lower.
However, Olson dismissed the safety issues of GLP-1 and predicted that future oral GLP-1 would move from prescription to OTC, attributing the current black box warnings to pancreatitis associated with first generation GLP-1s (such as exenatide) rather than the newer generation.
Oppenheimer noted that Viking Therapeutics(VKTX.US) oral weight loss candidate VK2735 is the best candidate for OTC. The dual agonist of the gut hormone receptors GLP-1 and GIP will present early research at the Obesity Week in early November.
Olson wrote: "Based on existing clinical data, we believe VK2735 is a potential candidate for OTC and look forward to updates at Obesity Week. The analyst also gave a buy rating and set a 12-18 month target price of $138 per share.