Diet pills are harvesting like crazy
Produced by|Tiger Sniff Medical Group
Author|Chen Guangjing
Editor|Liao Ying
Head Image|Visual China
In the past week, diet pills have made many A-share pharmaceutical companies "fly".
On September 11 and 12, the stock price of Daily Mountain Pharmaceutical closed two consecutive limit boards, with a cumulative increase of more than 40% within the two days. During the same period, Hanyu Pharmaceutical, Dezhan Health, Jinkaishengke, Huasen Pharmaceutical and other diet drug concept stocks also rose by more than 5%.
Investors' enthusiasm for diet pills simply can't pull back, not only diet drug concept stocks as a whole on the "roller coaster", Changshan Pharmaceutical, Huasen Pharmaceutical and other companies stock prices are "triple jump" in place, constantly refreshing the cognition of the melon-eating masses.
The diet pills sector rose 3.47% overall. Among the pharmaceutical brothers sectors, which rose by about 1.5%, it was simply a ride.
The causes of this craze are; On September 11, JPMorgan Chase released a report that it is expected that the market size of GLP-1 drugs represented by semeglutide will exceed $100 billion by 2030. Across the ocean, Eli Lilly, a multinational pharmaceutical company with many GLP-1 drug pipelines, has a market value of more than $560 billion on the NASDAQ, leaving the old pharmaceutical company Johnson & Johnson (with a market value of more than $430 billion), which previously ranked first, far behind.
However, in the carnival of Chinese investors, there is no domestic drug on the market that can compete with semeglutide has been approved, and analysts have also pointed out that GLP-1 diet drugs are still only a concept in A-shares, and the hype significance exceeds the actual value.
Neither Changshan Pharmaceutical nor other companies with large stock price increases are not the best on this track.
Nevertheless, as soon as the market opened on September 13, Changshan Pharmaceutical's stock price rushed to a new high during the rapid decline at the opening, and the final decline was only 3.8% at the close. Oriental Fortune Network's "Changshan Pharmaceutical Stock Bar" is still nearly half of investors bullish. Early on the morning of September 14, Changshan Pharmaceutical's stock price really jumped in place again, and it rose by more than 11% at the open.
Behind the enthusiastic entry of investors and such a radical rise in stock prices, what are the prospects for the development of GLP-1 diet drugs in the Chinese market? What are the hidden worries in the investment boom?
Changshan Pharmaceutical experienced a week of soaring stock prices.
Source: Oriental Fortune Network
Weight loss "miracle medicine" is very volatile in China
There is no doubt that GLP-1 drugs are a phenomenal hit, especially semeglutide, which has excellent weight loss effect and only needs to be administered once a week.
According to Novo Nordisk's semi-annual report, in the first half of 2023, the main effective ingredient is the three drugs of semeglutide - the injectable hypoglycemic drug Ozempic, the oral hypoglycemic drug Rybelsus and the weight-reducing drug Wegovy, with a total sales of DKK 72.166 billion, or about 10.385 billion US dollars, which is close to the sales of last year. It is a drug that has the potential to become the next generation of "medicine king".
In China, Frost & Sullivan predicts that there will be a market of 7.6 billion yuan for GLP-1 drugs by 2030. At present, a number of Chinese companies have entered the market, including: China Biopharmaceutical, Hengrui Pharmaceutical, Innovent Biologics, Huadong Pharmaceutical, Sinovac Pharmaceutical, Chia Tai Tianqing, Tonghua Dongbao, etc., and even the downstream Ali Health, Aimeike, etc. have also signed up early.
Some analysts even ridicule that people who make diet pills are more anxious than those who lose weight.
The Chinese part is under research
GLP-1 drug profile
Target Enterprise Indication Progress Division Meglutide GLP-1R Novo Nordisk Obesity Application for Marketing Tilpotide GLP-1R/GIPR Lilly Type 2 Diabetes Application for Listing Til Polypeptide GLP-1R/GIPR Lilly Phase 3 clinical trials such as obesity, cardiovascular risk, heart failure, obstructive sleep apnea, etc. Benaglutide GLP-1R Renhui Bio Obesity Application for Marketing EcnoglutideGLP-1/GLP-1R Xianda, Kain Technology Obesity, Phase 3 Clinical Trial of Type 2 Diabetes Grutazumab GLP-1/GLP-1R Hongyun Huaning Phase 3 Clinical Trial of Type 2 Diabetes Mels, Mastotide OXM/GLP-1R/GCGR Innovent Biologics, Eli Lilly Obesity, Type 2 Diabetes Phase 3 Clinical Trial of PEG Exenatide GLP-1R Paige Biologics, Tasly Phase 2 Diabetes Phase 3 Clinical Trial of Suparutotide GLP-1R Silver Pharma Phase 2 Diabetes Phase 3 Clinical Trial of Exenatide GLP-1R Uni-Biologics, PolyChem Phase 2 Diabetes Phase 3 Clinical Trial Noli Glycopeptide GLP-1R Hengrui Pharma Obesity (Non-Diabetic) Phase 3 Clinical Trial Albenatide GLP-1/GLP-1R Changshan Pharmaceutical, ConjuChem Biotechnologies Phase 3 Clinical Trial for Type 2 Diabetes ZT007GLP-1R/GDF15 Peptide Bio-Weight Loss Preclinical Trial
Data from: Public Information, Medicine Cube, Deppon Research Institute, etc. / Tiger Sniff Cartography
From the global clinical trial registration platform, there have been 867 clinical trials on GPL-1 drugs. The latest data from the Lilac Garden Insight database shows that the total number of GLP-1 drugs in China has exceeded 700. From single to double targets, from peptides to small molecule oral drugs.
Among the product candidates, Changshan Pharmaceutical is not outstanding. Huadong Medicine has approved the liraglutide biosimilar (i.e. generic drugs in biologics) in China. Other leading companies include Hengrui Pharmaceutical, Innovent Biologics, etc.
Among them, the GLP-1R/GCGR agonist mastotide jointly promoted by Innovent Biologics and Eli Lilly, from the phase II clinical data released in May this year, the drug can be used once a week and can lose 14.7 kg in 24 weeks. This performance is also considered comparable to semeglutide.
Moreover, looking back at history, it is not difficult to find that Changshan Pharmaceutical has a bad track record in hyping up the concept and raising the stock price after cashing out.
Back in 2018, the company blew up the market when it mentioned in its announcement that about 140 million people in China had impotence (ED).
At that time, the company had just been approved to produce generic drugs of sildenafil citrate (its original drug was Pfizer's Viagra, commonly known as "Viagra"), eye-catching data, coupled with considerable market prospects, the company's stock price was also up for two consecutive days, after the stock price reached a high value of about 8.69 yuan, the company's four controlling shareholders and executives reduced their holdings and cashed out more than 80 million yuan.
Later, because of this announcement, Changshan Pharmaceutical was also warned by the Hebei Securities Regulatory Bureau and fined 600,000 yuan.
This time, although Changshan Pharmaceutical has not yet cashed out, its attitude towards ebonatide is also quite vague.
During the soaring stock price, some media reported that as an investor, Changshan Pharmaceutical was consulted, and the company revealed that the company had products similar to semeglutide and liraglutide entering phase III clinical trials, with the indication of diabetes, and it is expected to submit a registration application at the end of the year.
After that, Changshan Pharmaceutical officially issued an announcement late to clarify that its GLP-1 drugs are ebonatide, and the development indication does not involve obesity indications. According to the company's annual report, ebernatide is still a research and development project launched 10 years ago (2013), and it is difficult to say how much chance there is to win in today's fierce competition.
According to the company's 2023 half-year report, Changshan Pharmaceutical's operating income from January to June this year was 820 million yuan, down 28.45% year-on-year; The loss was 168 million yuan, and the net profit decreased by 369.53% year-on-year.
Since its establishment in 2000, Changshan Pharmaceutical's main business is the research and development, production and sales of heparin series products such as anticoagulant, antithrombotic drug heparin sodium API, low molecular weight heparin calcium injection, etc. In recent years, affected by the aging population and the increase in the number of venous thromboembolic diagnoses, the demand for heparin drugs has increased year by year, and by 2021, the market size of such drugs in China will exceed 30 billion yuan.
On this basis, Changshan Pharmaceutical's revenue and net profit are also growing year after year. By 2021, revenue and net profit will reach peak 2.968 billion yuan and 233 million yuan, respectively. Among them, unfractionated heparin APIs accounted for 23.32%, low molecular weight heparin APIs accounted for 17.55%, and low molecular weight heparin preparations accounted for 56.07%.
Because heparin drugs involve people's livelihood, large dosage, product production technology, etc. are relatively mature, procurement with volume has always been a sword hanging over the head of Changshan Pharmaceutical. In 2022, this sword will be the first to land in Guangdong Province, directly cutting off more than 20% of the company's product revenue.
Sales of Changshan Pharmaceutical's main products in 2022
From Changshan Pharmaceutical's 2022 annual report
By the beginning of 2023, the national centralized procurement will include such products, and the revenue of ordinary heparin APIs, the main source of revenue for Changshan Pharmaceutical in the first half of the year, has decreased by 72.35% year-on-year. It can be said that the company's "cash cow" is in jeopardy.
As for "sildenafil citrate", which once aroused the enthusiasm of shareholders for investment, although it claims that its sales volume has increased significantly, it has not reached the level of publishing data; Ebenatide started the phase III clinical trial in May 2020, and no results have been officially announced so far.
If it weren't for the story of diet pills, it's hard to imagine that market confidence would lean toward this pharmaceutical company.
Chinese pharmaceutical companies may not be able to share the pie
In addition to the fact that GLP-1 products do not involve obesity indications similar to Changshan Pharmaceutical, the future of Chinese drugs on this track does not seem to be bright.
"Some are just imitations." Wang Cong, who has long tracked and reported on cutting-edge research and industrial progress in biomedicine and is now the editor-in-chief of Bioworld, told Tiger Snigh.
For example, the recently approved liraglutide (trade name: liraglupin) of East China Medicine is actually a "generic drug" of Novo Nordisk's previous generation GLP-1 drug liraglutide (trade name: Novo Radio).
Dual-target drugs, such as Innovent and Eli Lilly's mastard peptide, although it is expected to compete with semeglutide and is very promising to become the "replacement" of the drug, but if it cannot be marketed in time, the market space may be affected.
"The window period is very short." Wang Cong said to Tiger Sniff. GLP-1 drugs iterate very quickly. Even semeglutide will soon face the challenge of a new generation of products - Lilly's dual-target weight loss drug "tirptide" may be approved by the FDA by the end of this year.
In the future, if the price war hits the field of small molecule oral drugs with lower costs and more convenience, Chinese pharmaceutical companies, which have lagged behind in terms of timing, will only have to watch the excitement.
The "volume" of GPL-1 drugs, the "miracle drug" for weight loss, is also different from PD-1. The latter can at least be shared by Chinese pharmaceutical companies in the tens of billions of markets, while the former can be called a "fairy fight", and Chinese pharmaceutical companies are likely to be unable to intervene. Not to mention Changshan Pharmaceutical, even Huadong Pharmaceutical, which has been approved for related products, and Innovent Biologics, which is considered to have great potential, is difficult to get a piece of the pie.
In the past, many overweight people could only be treated with bariatric surgery.
From: Visual China
In fact, GLP-1 diet drugs are not a new thing, semeglutide has previously only been approved for at least 6 GLP-1 drugs such as dularglutide, liraglutide, exenatide, etc., of which liraglutide and dulaglutide got the weight loss indications earlier, and what really makes semeglutide out of the circle is its weight loss effect.
According to the data published by various companies, the existing diet drug Roche's orlistat has a 52-week weight loss effect of 10.2%: 6.1% compared with placebo; Liraglutide compared with placebo, weight loss effect 8% at 56 weeks: 2.6%; The weight loss effect of semeglutide at 68 weeks was 14.9%: 2.4%.
Simply understood, under the same conditions, the advantages of using drugs to lose weight compared to not using drugs have increased.
Excluding the effect of Tesla CEO Musk and other celebrities, from the trial data alone, the weight loss effect of the product has far exceeded that of placebo, although it is not "head-to-head" data, it still crushes all previous weight loss products.
This logic also means that drugs with better weight loss effects in the future will soon eat into the market for semeglutide. The effect is far less than that of semeglutide, and the drug with higher frequency of administration is difficult to seize the share from its hands. This is especially true when entering consumer healthcare.
In order to continue to occupy the high ground, Novo Nordisk and Eli Lilly have a very tight competition in product development. Among the above-mentioned Chinese GLP-1 projects, Eli Lilly and Novo Nordisk accounted for more than 1/3, with 133 and 120 projects respectively.
The development of diet drugs did not happen overnight. Semeglutide entered the laboratory research and development stage in 2012, entered the clinical clinic in 2015, and its diabetes treatment indication was approved in 2017. It was not until 2021 that the drug's weight loss indications were officially approved in the United States. It takes at least 2 to 4 years from clinical to market.
这还是在礼来和诺和诺德，在糖尿病领域，都有几十年乃至上百年深度积累的基础上。
It can be seen that in order to face semeglutide, Lilly directly rolled the next generation of drugs. Data released not long ago showed that the company's telzepatide (effective for GLP-1R and GIPR targets) increased the weight loss effect to 22.5%, the drug is expected to become the strongest weight loss drug, and is also doing "head-to-head" research with semeglutide. Another oral drug, Orforglipron, achieved the weight loss effect of semeglutide at 36 weeks.
Of course, Novo Nordisk's defense is also unequivocal. The latest research data of semeglutide oral preparations show that the average weight loss level at 68 weeks reached 17.4%:1.8%, and the weight loss was about 18.3 kg. At the same time, drugs that work against both targets are also being developed.
Here, the indications of semeglutide have expanded from diabetes, cardiovascular diseases, non-alcoholic fatty liver hepatitis and other diseases, all the way to alcohol abstinence, cancer prevention, and reducing potential metabolic diseases in patients with heart failure.
Over there, on the global clinical trial registration platform, around the new Retatrutide that works against three targets (GIPR/GLP-1R/GCGR), Eli Lilly has filed 5 clinical studies.
In the back-and-forth struggle, this gold rush of diet pills, not only Chinese companies may not be able to win, but also many multinational giants are difficult to stain.
From the perspective of research and development, GLP-1 drugs are forming a pattern of duopoly competition, in addition to the fierce dismantling of Novo Nordisk and Eli Lilly, Pfizer, Novartis, AstraZeneca, etc., have pipeline research and development failures and fall off the track.
From: Visual China
The hidden worries behind the investment boom
Overall, although GLP-1 drugs are a rare diet drug "regular army", it is also a popular drug to boost the confidence of the pharmaceutical industry. In the long run, GLP-1 drugs are also expected to revolutionize the paradigm of obesity-related diseases as indications continue to expand—the shift in treatment to health management around weight seems to be moving in a better direction.
However, behind its rapid rush, insufficient production capacity, unsolved carcinogenic doubts in the short term, and side effects such as suicide, self-harm, weight rebound, nausea, and vomiting in users are also hidden dangers that cannot be ignored.
Not long ago, official media such as CCTV and Beijing Youth Daily are reminding the public to pay attention to the risks brought by drugs such as semeglutide, the "miracle drug" for weight loss.
As the saying goes, "it is medicine with three points of poison". In the normal use of any drug, it is inevitable that there will be effects unrelated to the efficacy of the drug, which is the adverse reaction of drugs and the side effects that people often say. Side effects are not necessarily bad, but they can also be risky. Because of this, many drugs need to be used as directed by a doctor.
In a clinical expert consensus on GLP-1 drugs for the treatment of type 2 diabetes released by the Chinese Medical Association, endocrinologists believe that GLP-1 drugs have high clinical value, but they also remind patients with a history or family history of medullary thyroid cancer and multiple endocrine adenomas type 2 to be banned; At the same time, experts suggest that such drugs may cause gastrointestinal reactions, hypoglycemia and acute pancreatitis.
According to the latest expert consensus of Guangdong Pharmaceutical Association on GLP-1 drugs, GLP-1 drugs will inhibit gastrointestinal motility when they play a weight loss role, and will also bring a series of effects on the liver and kidneys, heart, muscles, bones, etc., including: reducing fatty liver, leading to increased cardiac output and increased insulin secretion.
From: Guangdong Pharmaceutical Association "Expert Consensus on Clinical Application of Glucagon-like Peptide-1 Receptor Agonist (GLP-1RA)"
At present, semeglutide has not been approved for weight loss indications in China, and in the context of body anxiety, many users are not overweight, nor are they obese patients, and their understanding of their own health is very limited, which invisibly increases the risk.
If the timeline is extended, humans can be described as painstakingly trying to lose weight. From liposuction surgery to various diet drugs, to bariatric surgery that became famous because of Internet celebrities and celebrities, and GLP-1 drugs such as semeglutide, there was a long time when weight loss therapy had limited effects, and the chaos and harm were very serious. Many people even pay with their lives to become thinner.
Safety is a very important indicator of medicines, especially for weight loss products with milder and wider range of disease in the audience.
Historically, a variety of diet pills have also been abandoned or restricted because they can easily cause serious health problems. Among them are sibutramine, which has become a "banned drug", ephedrine, amphetamines, etc., which are no longer used for weight loss, and the little-known "sheep thyroid extract" "2,4-dinitrophenol" - these two drugs have been banned globally due to arrhythmia, death, dead high fever, agranulocytosis, etc.
From: Changjiang Securities Research Institute
With the outbreak of the diet drug market, the drug population is getting bigger and bigger, the research around GLP-1 will be more and more in-depth, and the safety test of the drug has also kicked off.
Weight loss, in today's almost everyone is facing the issue, either to lose weight themselves, or family members need to lose weight. According to the Report on Nutrition and Chronic Diseases of Chinese Residents (2020), more than half of China's adult residents are overweight or obese, accounting for 34.3% and 16.4% respectively. Among adolescents and children aged 6-17 and under 6 years old, the highest rate of overweight and obesity also reached 19%.
The resulting weight loss market size is also rising. According to iiMedia Research, China's functional slimming food market alone reached 338.71 billion yuan.
Boosted by GLP-1 drugs, the "miracle drug" for weight loss with better and obvious effects, JPMorgan Chase predicts that the size of China's diet drug market will reach US$14.9 billion, equivalent to RMB108.4 billion, by 2030. Coupled with the weight loss demand stimulated by body anxiety, the actual market size may be larger. This is also the logical basis for the crazy rise of weight loss concept stocks.
However, in any case, investors, pharmaceutical companies, and those who hope to lose weight "lying down" with drugs must pay attention to the fact that there is no panacea in the world. Diet pills cannot cure all diseases, let alone become a lifesaver for any enterprise.