Hong Kong Stock Concept Tracking | Oral Semaglutide Approved for Listing in China, Weight Loss Indication on the Way, Domestic Companies Also Have Layout (with Concept Stocks)

According to Zhitong App, Novo Nordisk AS (NVO.US) has obtained approval from the National Medical Products Administration to launch its oral GLP-1 receptor agonist, semaglutide tablets, for the treatment of type 2 diabetes. This is the first domestically approved oral GLP-1 receptor agonist. CITIC Securities believes that there is a wide base of overweight and obese patients in China, and the demand for health will continue to drive the growth of the GLP-1 drug market. At the same time, GLP-1 drugs have a wide range of potential applications, further expanding the corresponding market space. Related concept stocks include FOSUN PHARMA (02196), Sinopharm Biological (01801), and Luye Pharma (03933).

It is understood that semaglutide is the main active ingredient in Ozempic, a blood sugar-lowering drug, and Wegovy, a weight-loss drug, developed by Danish pharmaceutical giant Novo Nordisk AS. It is a GLP-1 receptor agonist that stimulates insulin secretion, inhibits glucagon secretion to delay gastric emptying, and reduces appetite, ultimately achieving the effect of lowering blood sugar and losing weight. Previously, Novo Nordisk AS's semaglutide injection was approved for the treatment of type 2 diabetes in China, while the oral version of semaglutide has been approved for marketing in multiple countries and regions, including the United States, Europe, and Japan.

By the end of 2022, due to its good efficacy and celebrity endorsements such as Elon Musk, semaglutide has become a popular "miracle weight-loss drug," and its various products were in high demand. The price of semaglutide on internet pharmaceutical platforms soared to thousands of yuan, and the upstream peptide raw materials also experienced price increases. At that time, the secondary market responded enthusiastically, and as the pharmaceutical company that ignited the weight-loss drug craze, Novo Nordisk AS's stock price on the US market rose by about 60% in the whole year of 2023, with a current market value of nearly $500 billion.

Regarding the two versions of semaglutide, a pharmaceutical company employee who has been involved in related drug development said that the gastrointestinal adverse reactions produced by the oral version may be more pronounced, but it is easier to store compared to the injectable version. The injection is administered weekly, while the oral version is taken daily, so it is hard to say which one has better compliance. However, for some people, getting injections does require a lot of courage. In addition to weight loss, the oral version is also being explored for its potential in treating Alzheimer's disease, but the trial has just started and there is no relevant data disclosure yet.

Some industry experts believe that in order to gain recognition from diabetes patients, the pricing of semaglutide tablets is crucial. Additionally, this drug may also be approved for weight loss indications in the future, taking a share of the weight-loss drug market.

According to Morgan Stanley Research, the global prescription weight-loss market is expected to exceed $77 billion by 2030, with a compound annual growth rate of 36% from 2024 to 2030. JPMorgan Chase predicts that by 2030, global annual sales of GLP-1 drugs will reach $100 billion.Domestic pharmaceutical companies are also targeting the two major indications of diabetes and weight loss for GLP-1 drugs. Many companies such as Huadong Medicine, Renhe Bio, Hengrui Medicine, and Xinda Bio have entered the field of GLP-1 drugs. In July 2023, two domestically produced GLP-1 drugs were approved for marketing, namely Huadong Medicine's biosimilar liraglutide and Renhe Bio's innovative drug benaglutide.

In terms of the development of oral GLP-1 drugs in China, Eli Lilly's LY3502970 capsule, which targets the GLP-1R receptor, is the most advanced and is currently in phase III clinical trials. On January 23rd, Tonghua Dongbao stated on the investor relations platform that the company's GLP-1 products under development include an innovative oral small molecule GLP-1 receptor agonist (THDBH110 capsule). In addition, companies such as Wentai Medicine and Xintai Medicine also have pipelines of oral GLP-1 drugs under development.

According to a research report by Huachuang Securities, it is estimated that the GLP-1 weight loss drug market in China is expected to reach 48.6 billion yuan by 2032. Considering the future launch of more effective and compliant GLP-1 drugs, weight loss is expected to become a consumer demand. Looking further ahead, the Chinese GLP-1 weight loss market is expected to exceed 100 billion yuan.

Debang Securities released a research report stating that according to statistics from the "Chinese Expert Consensus on Obesity Prevention and Control," more than half of Chinese adults are overweight or obese, with an estimated population of over 600 million. GLP-1 is a naturally occurring intestinal insulin in the human body that has a weight loss effect through the central nervous system and the gastrointestinal tract. The GLP-1 weight loss drug market is booming, with a market size of billions of dollars, which helps Eli Lilly and Novo Nordisk AS become the top three pharmaceutical companies in the world by market value. With the approval of multiple weight loss drugs in the United States and China, Debang Securities believes that the weight loss drug market will explode, with strong consumer attributes and great potential, making it worthy of attention.

Related concept stocks:

FOSUN PHARMA (02196): On October 17, 2023, FOSUN PHARMA stated on the interactive platform that the company's in-development drug liraglutide (intended for the indications of diabetes and obesity) is currently in phase III clinical trials in China.

Xinda Bio (01801): On September 12, 2023, Xinda Bio announced that the company plans to raise HKD 2.356 billion through the placement of new shares, with approximately 30% of the funds, or HKD 707 million, intended for the development, marketing, and commercialization of IBI362 (mashidu peptide), a GLP-1R/GCGR dual agonist for the treatment of diabetes and obesity, and a potential best candidate drug in the clinical stage.

Federal Pharma (03933): On September 26, 2023, Federal Pharma announced that the investigational new drug (IND) application for the company's independently developed innovative drug UBT251 injection, which is intended for the indications of type 2 diabetes, overweight, or obesity in adults, has been approved by the U.S. Food and Drug Administration (FDA) through its wholly-owned subsidiary Federal Biotechnology (Zhuhai Hengqin) Co., Ltd. The IND numbers are 167739 and 167740.