While there's some ambiguity about the term "next generation" when it comes to weight loss therapies, one thing is clear: Unlike the current generation of weight loss drugs, the ideal weight loss medicines won't cause patients to lose muscle mass while they're being treated.
The first business to develop one of those more ideal weight loss drugs will likely see a significant windfall. There are already a couple of companies in particular that have candidates in development which might fit that bill, so let's examine each, as they're both worth buying.
1. Eli Lilly
As a player in the weight loss market, Eli Lilly (NYSE: LLY) is best known for its blockbuster drug Zepbound, which is indicated to treat obesity. In the second quarter alone, sales of Zepbound were worth more than $1.2 billion. But the company is in the process of doing a lot more research and development (R&D) activity within cardiometabolic medicine, and, though it has many next-generation candidates, one stands out as being especially promising.
Lilly is currently doing a phase 2 clinical trial investigating whether its antibody called bimagrumab is helpful for weight loss, either when used alone, or when used in conjunction with Novo Nordisk's drug semaglutide, which is commonly known by the trade names Ozempic and Wegovy. Specifically, the trial is looking at whether bimagrumab is capable of protecting muscle mass during treatment with semaglutide, or potentially even increasing it despite the patient's weight falling overall.
There's reason to believe that Lilly will find the beneficial impacts it's looking for here. In a prior phase 2 study conducted by third-party researchers investigating the effects of the candidate on patients with both type 2 diabetes and obesity, the results were phenomenal. After 48 weeks of treatment, patients lost, on average, 20.5% of their total fat mass while actually gaining 3.6% of their lean mass, significantly trimming their waistlines, reducing their total body weight by 6.5%, and improving their blood glucose levels, too. Rates of experiencing side effects, as well as the intensity of side effects, were fairly similar between the treatment and placebo groups.
Lilly's study of bimagrumab is expected to wrap up in mid-2025. If the results agree with the other trial's, the business will doubtlessly want to advance the program into phase 3 studies and then commercialization, assuming regulators give it the green light.
If it is eventually approved for sale, it will probably not struggle to gain market share, even in the face of determined opposition. A weight loss medicine that efficiently liquidates fat around the abdomen while slightly boosting muscle growth is an obvious winner, and so far there's nothing else on the market that can compare. And, when paired with Lilly's extensive efforts to make other souped-up anti-obesity medicines, its stock could see a significant catalyst if the phase 2 results look favorable, so it's one more reason to buy the stock now.
2. BioAge Labs
BioAge Labs (NASDAQ: BIOA) is still working on launching its first drug, but its lead candidate could offer a highly compelling set of advantages over today's crop of weight loss drugs. That program, called azelaprag, could also potentially help patients to lose weight while preserving or perhaps even augmenting their lean muscle mass.
At the moment, azelaprag is in phase 2 clinical trials testing it as a combination with the blockbuster weight loss drugs produced by both Eli Lilly and Novo Nordisk. The results from its phase 1b clinical trial are promising.
In a 10-day study of 21 seniors confined to bed rest -- as in, the patients weren't allowed to leave their bed for more than a week -- only one of the 11 patients in the treatment group experienced a decline in their muscle quality, compared to eight out of the 10 in the placebo group. Their muscles also retained their dimensions significantly better than the patients who were administered the placebo. In particular, their thigh circumference measurement was two times as, on average.
In fact, some of the patients getting azelaprag actually saw some of their muscle dimensions increase a small amount. Pre-clinical data from animal models also suggest that the candidate has a potent weight loss effect via prompting a slew of favorable metabolic changes, but those findings will need to be replicated in humans before they're worth getting excited about.
BioAge claims that azelaprag is capable of these impressive accomplishments because it leads to physiological effects that overlap the effects of physical exercise. If that's true, barring any major safety signals and assuming that the remaining clinical trials go as planned, it's easy to see how it could be working on a home-run drug here. It's worth buying the stock on the basis of that potential, as long as you keep your exposure small for now, and as long as you're comfortable with investing in a highly risky pre-revenue biotech stock.
But don't let this biotech's long road to revenue be too discouraging. On Oct. 1, it closed its initial public offering (IPO) and a concurrent private placement of its shares, raising gross proceeds of more than $238 million. Its trailing-12-month operating expenses were just $51.5 million, so it has at least a couple of years before it'll need to raise more cash, even when considering the higher costs of running mid- and late-stage clinical trials in the near future.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
