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The Big Biotech Bets On New Obesity Treatments

February 2, 2024
x min read

Obesity is an enormous health problem. And recently, Wall Street, Silicon Valley and pharmaceutical companies have been making a flurry of new deals focused on solving it.

What’s happening:

  • Wall Street and Silicon Valley have recently been making big new bets on potential breakthrough ways to treat obesity through novel therapeutics

Who is making moves:

  • Eli Lilly (NYSE: LLY) recently announced a joint venture deal with biotechnology company Fauna to accelerate the development of their artificial intelligence powered drug discovery technology for new therapeutics to treat obesity, which enables Fauna to earn up to $494M USD in milestone payments
  • a16z recently led a $20M USD round for healthcare company Knownwell who provides digital healthcare and support for individuals looking to lose weight
  • Resalis Therapeutics raised a €10M Series A financing to advance their first ever clinical trials for their novel drug that aims to reduce fat mass in obese individuals

Why it matters:

  • Obesity is very difficult to treat and has not had many breakthrough therapeutics or new treatment options that are considered to be highly effective
  • Individual obesity rates have continued to climb globally and is now widely seen as one of the most important health problems to solve as obesity is highly correlated to shorter life spans

Going deeper:

  • Novo Nordisk (NYSE: NVO) has arguably been the most active deal maker in obesity therapeutics and has made waves with their highly controversial drug Ozempic that has risen to extreme popularity for its ability to help individuals rapidly lose weight
  • Novo Nordisk recently announced a deal with EraCal Therapeutics, which was spun out of Harvard and Zurich University, to advance their therapeutics focused on reducing appetite without significant adverse side effects
  • Novo Nordisk also recently entered into a new deal with two different biotech companies founded by Flagship Pioneering who are focused on obesity related therapeutics that could see them earn up to $1B USD based upon clinical trial milestones

Yes, but:

  • Many healthcare providers are skeptical of new drug development for rapid weight loss, claiming that novel therapeutics designed for weight loss often have severe side effects or unintended harm on vital organs
  • The majority of new biotechnology startups pursuing therapeutics for obesity are yet to advance through human clinical trials or see significant validation of the effectiveness of their drugs in sustained weight loss

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