Obesity: A Primer on the Condition and its Treatments
The recent development of weight loss medications has grabbed headlines this year, putting obesity, a largely silent epidemic threatening society today, into the limelight. Obesity is a complex disease that often commands several approaches to treat effectively and, as a result, remains poorly managed. In addition to the newly introduced pharmaceutical drugs, there is a continuous emergence of device-based and digital-based innovations within the treatment paradigm to address this unmet need. Earlybird Health Partner Thom Rasche, Principal Dr. Christoph Massner, and Investment Professional Junkai Zhu will cover these innovations in the first article of a two-part series. The second piece will explore in detail GLP-1 medication treatment, as well as its implications on reimbursement and the broader healthcare market.
Obesity in Numbers
The World Health Organisation (WHO) definition of obesity is a body mass index (BMI) greater than or equal to 30. It is estimated that over 750 million people worldwide are living with obesity, and only 2% are medically treated for the condition. While there’s a common belief that obesity is most widespread in developed nations due to overconsumption, this narrative doesn’t capture the entire picture. Countries such as the US, Turkey, Iraq, Syria, Libya, and Egypt experience the highest rates of obesity prevalence and only limited regions in the world still remain unaffected by this epidemic (more in Figure 1).
The high prevalence of obesity is a significant concern, considering that comorbidities linked to obesity rank among the top causes of preventable premature deaths globally, estimated to contribute to 5% of all deaths worldwide. This is because more than 88% of people with obesity have at least one obesity-related comorbidity, with an estimated 25% of obese people having three comorbidities. Some of the most serious comorbidities include type 2 diabetes, cardiovascular disease, hypertension, and cancer (more in Figure 2).
Obesity Treatments and Market Insights
Obesity treatments can be categorised into directly tackling the satiety pathway within the body, either biochemically or mechanically, and changing the behavioural habits that lead to weight gain. Below is an overview of the obesity treatment landscape categorised into pharmaceutical, device-based, and digital approaches.
(i.) Pharmaceutical approaches
Prominent launches and key trial results of weight loss drugs have generated fervour in the obesity treatment landscape. These drugs are GLP-1 agonists, which mimic the function of GLP-1, a key hormone in regulating appetite to prolong the feeling of satiety. As previously mentioned, the second article in this series will explore a deeper dive into the GLP-1 agonists.
The GLP-1 agonists market is still relatively nascent but is projected to grow rapidly throughout the decade. Morgan Stanley foresees a growth in market size from $15 billion in 2024 to $77 billion in 2030, reflecting a 32% compound annual growth rate (CAGR). The expected increase in revenue for pharmaceutical companies Eli Lilly and Novo Nordisk, the key players behind these weight loss drugs, has led to significant upticks in their market capitalization. Currently, they rank as the top two largest pharmaceutical companies by market capitalisation globally. This marks a noteworthy shift from their previous standings in 2021, with Eli Lilly ranking fourth and Novo Nordisk eighth, before the widespread popularity of the GLP-1 drug.
As of now, the anticipated high growth rate is unfolding, as the high demand for weight loss drugs has led to supply challenges. Even under these supply constraints, one of the prominent GLP-1 agonists, Wegovy, grew 490% in the first nine months of 2023 versus the same period last year. Its parent company, Novo Nordisk, is already working on expanding its manufacturing capacity through $6bn and $2.3bn investments in factory sites in Denmark and France respectively.
Although GLP-1 agonists are still relatively new, developments are already underway to reduce its hurdle rate for patients by shifting the delivery mechanism from an injectable to an oral drug. Alongside these developments, we continue to see other biopharmaceutical innovations in the obesity treatment field. One example is MetaShape Pharma, a pre-clinical biotech company working to transform unhealthy white fat cells into healthy brown fat cells.
(ii.) Device-based approaches
A more mechanical approach to tackling obesity involves the use of medical devices and surgical procedures. Due to their invasive nature, these methods are typically restricted to individuals with the highest obesity levels, indicated by a BMI of 35 or greater. This limited applicability has now been further compounded by the introduction of the GLP-1 drugs, which has reportedly driven delays and postponements of surgery.
However, on average, bariatric surgery is more effective than its drug alternatives, highlighting that their role in treating the most obese patients could remain unchallenged (average weight loss per approach is shown in Figure 3). This would be in line with the forecast from Intuitive Surgical, which believes that patients would most likely only take the weight-loss medications for one to two years due to a combination of lack of compliance, cost, and side effects.
Still, the market opportunity is likely to remain far smaller than the more accessible weight loss drugs because of the higher hurdle rate of surgery compared to an injectable. Bariatric surgery, for instance, is expected to increase from $3 billion in 2024 to only $6 billion in 2030.
Key device-based approaches include:
- Apollo Endosurgery’s Orbera Intragastric Balloon (Apollo Endosurgery was acquired by Boston Scientific in November 2022) — the market leader in gastric balloons which is the temporary placing of an inflatable device in the stomach to promote a feeling of fullness and reduce food intake.
- Apollo Endosurgery’s OverStitch Endoscopic Suturing System — the market leader in endoscopic suturing which is the use of internal sutures to reshape the stomach and reduce its capacity.
- Bariatric surgery — modifying the gastrointestinal tract by either creating a smaller stomach pouch and rerouting the small intestine or removing a portion of the stomach to restrict the amount of food it can hold and reduce the absorption of nutrients in the small intestine. Key players in this field are Intuitive Surgical, Abbott Laboratories, and Johnson & Johnson.
- Duodenum sleeve — inserting a sleeve in the first part of the duodenum, the initial section of the small intestine, which leads to a delay and reduction in the absorption of nutrients further altering the hormonal signals related to appetite Major players in this subsector include Apollo Endosurgery and Medtronic.
- Ablation treatment of the Duodenum — Using RF energy or pulsed field ablation (PFA) to amend the surface of the first part of the duodenum which would reduce the absorption of nutrients. Companies like Fractyl or Endogenex are at the forefront of innovation in this field and are showing initial clinical data as effective as duodenal sleeves in terms of inducing weight loss.
Notable medical device innovations we have seen in our deal flow include Sedivention, a company working on a gastric catheter that freezes hunger nerves to reduce appetite, and Nitinotes, a clinical-stage firm developing EndoZip, an innovative robotic endoscopic suturing system for minimally invasive gastroscopic suturing in patients ineligible for bariatric surgery.
(iii.) Digital approaches
Telehealth has emerged as a prominent trend in recent years, experiencing a surge in popularity during the Covid-19 pandemic. Although supply constraints currently hinder some patients’ access to these weight loss drugs, a crucial focus for the future will be to ensure that the appropriate patients have proper access to the drug once the supply issues have been resolved. We are witnessing innovations on this front through companies building out digital platforms dedicated to ensuring patients with obesity can be seen and prescribed the drugs appropriately. Telehealth and consumer-facing companies such as Teladoc, WeightWatchers, and Ro are improving access to GLP-1 drugs by matching prescribers virtually to patients so the drugs can be prescribed and delivered with minimal barriers.
Additionally, neither pharmaceutical drugs nor device-based approaches are one-off solutions for obesity. Patients cannot be prescribed these drugs for a lifetime due to the side effects and high costs, and no number of devices and surgical procedures will be able to counteract the poor habits accumulated by patients as the eventual wear-and-tear will diminish treatment effects and result in relapses. The STEP 1 extension study from the University of Liverpool indicates that people who stop taking the medication regain two-thirds of the weight lost in the first year. Similarly, Novo Nordisk highlights that discontinuing the use of the GLP-1 agonists can cause patients to regain all the weight lost in five years.
Behavioural change programs can act as disease companions to ensure patients maintain weight loss once they stop taking the drugs. This holds significance because, in specific countries, like the UK and France, reimbursement is contingent on patients sustaining their weight loss and participating in a behavioural modification programme in chronic weight management. Pharma companies will rely on digital health solutions to secure reimbursement in these markets and successfully establish market access. Companies in this space include our Earlybird Health portfolio company, Oviva, which offers digital weight loss management.
We believe that long-term success will require patient commitment and behavioural change, which is where digital approaches can really make a positive impact on the obesity treatment journey.
The digital therapeutics market is anticipated to climb from $4 billion in 2024 to $15 billion in 2030, with obesity likely constituting only 25% of the overall market share. Due to the recent popularity of the GLP-1 drug, we believe there’s still room to grow in terms of integrating a digital component into a patient’s weight loss journey.
Through our deal flow, we see several new innovations on the horizon which either improve patient access to prescribers or bridge the gap between undergoing treatment and attaining a sustainable positive outcome. One such company is Lifeness, a dedicated obesity and well-being telehealth company virtually connecting patients with clinicians using a cloud-based medical platform to improve accessibility for weight loss drugs. Liva Healthcare is another innovative platform which has partnered with the UK’s NHS where it offers a 12-week Digital Weight Management Programme to encourage and support patients on their weight loss journey in addition to helping them build healthier habits. Finally, digital diagnostics is another emerging field in the treatment of obesity. Companies like Phenomix Sciences are predicting how patients will respond to different weight loss interventions through a simple saliva test. This enables clinicians to deliver more personalised care in the treatment of obesity.
The development of the GLP-1 agonists has marked a turning point in the future of obesity care, a field where significant unmet need exists and one which is ripe for disruption.
Keep an eye out for our upcoming second article, delving into the science and impact of these weight-loss drugs, along with our insights on future opportunities in this space.
If you are a company in this space, get in touch with Thom, Chris, and Junkai, or send us an intro email at health@earlybird.com!
References
https://www.who.int/news-room/fact-sheets/detail/obesity-and-overweight
https://investor.novonordisk.com/q3-2023-presentation/?page=115
https://www.rcpjournals.org/content/clinmedicine/13/5/472
https://companiesmarketcap.com/pharmaceuticals/largest-pharmaceutical-companies-by-market-cap/
https://www.sphericalinsights.com/reports/bariatric-surgery-devices-market
https://www.grandviewresearch.com/industry-analysis/digital-therapeutics-market
https://drwizman.com/obesity-comorbidities/
https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/411160
https://www.visualcapitalist.com/worlds-biggest-pharmaceutical-companies/#google_vignette
https://www.massdevice.com/intuitive-surgical-upside-glp1-weight-loss-drugs-bariatric/
