PitchBook News - Winners in the obesity drugs race

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The Research Pitch

September 14, 2024

Presented by Citizens

Healthcare shift: We expect tech will only grow in importance within the broader PE healthcare strategy. Our new report offers an updated taxonomy for the IT space and highlights key trends. Read it here.

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A resurgence in IPOs? Six factors that could predicate a rebound

IPO activity can be sensitive to a range of factors. In the latest article from Citizens, Andrew Mertz, Managing Director and Head of Equity Capital Markets at Citizens JMP, outlines six key leading indicators that could drive an IPO resurgence and a long-term return to normal deal volume levels.

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Picking the next public and private winners in the obesity drugs race

The race to develop and market GLP-1 drugs to treat obesity represents one of the most significant trends shaping the biopharmaceutical industry today.

In a groundbreaking new report, Morningstar Institutional Equity Research and PitchBook Institutional Equity Research analysts collaborated to predict how the next wave of obesity drugs will unfold across both public and private markets.

The frontrunners

Novo Nordisk and Eli Lilly's market capitalizations have each been catapulted as they dominate the rapidly growing market for obesity drugs.

Sales of GLP-1 drugs hit $36 billion in 2023 and are on track to surpass $50 billion this year. Morningstar analysts predict this market will balloon to more than $200 billion by 2031 as Novo and Lilly expand their reach and as new challengers come to market.

This growth is likely to come despite heavy discounting as new firms try to gain share (and as Novo and Lilly try to gain broader insurance coverage) with lower prices.  

New entrants poised in public markets

Amgen is well positioned to be one of the next big firms entering the market, as it is already planning to move to phase 3 trials.

Roche acquired two key drug candidates from private firm Carmot earlier this year, and early efficacy data looks competitive with next-generation programs from Lilly and Novo.

AstraZeneca's obesity pipeline got a boost from a license agreement with private firm Eccogene in 2023, and Pfizer's own danuglipron could advance quickly to pivotal trials if the firm gets a handle on once-daily dosing.

Expect M&A for obesity biotechs

Any big pharma company that doesn't already have an obesity pipeline is likely considering buying one—meaning VC-backed players should see robust exit opportunities.

Emerging obesity drug development startup raises have been dominated by megadeals and sourcing Asia-based assets. Merck and J&J may be most likely to make significant deals—perhaps targeting smaller public firms with recent positive data, like Viking or Structure Therapeutics.

Metsera and Hercules stand out as acquisition targets among private firms, and the newly announced BioAge and MBX Biosciences IPOs also reflect the strong interest in obesity investing.

For more analysis, download the free report here: Obesity Drugs: The Next Wave of GLP-1 Competition

Karen Andersen, CFA
Strategist, Biotechnology, Morningstar

Kazi Helal, Ph.D.
Senior Analyst, Biotech, PitchBook

Damien Conover, CFA
Director of Equity Research, North America, Morningstar

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Market Updates

Global Private Market Fundraising Report

Private capital fundraising may be bouncing back.

GPs raising secondaries or real assets vehicles are having a particularly better year, but the fundraising trail is still a grind for others—especially in venture and real estate.

Click to access 46 more charts on fundraising trends.

Closing times for VC funds are growing longer, and with LPs being more selective, emerging managers are still having a difficult time:

Read the free report

MENA Private Capital Breakdown

In the Middle East and North Africa, amid one of the region's toughest market situations in years, both dealmaking and fundraising slowed during H1.

So, where are there still pockets of optimism?

Healthcare and new technologies are among the most favorable sectors:

Read the free report

Thematic Research

Checking In on India's Unicorns

India's herd of $1 billion-plus startups has multiplied over the past decade, but the slowdown in VC dealmaking has cast doubts over its continued growth.

India stands only behind the US and China in total unicorns.

A fast-growing economy and a resilient public market offer positive signs for the future health of India's unicorns.

However, valuations have come under pressure globally, leaving these unicorns to face the possibility of down rounds if the need for capital arises:

Read the free research

Industry & Tech Research

Mobility Tech Report

The autonomous driving segment powered mobility tech funding in Q2, with deal value reaching $6.7 billion—up 14% over the previous quarter.

But fewer companies are fueling the gains, with startups like Wayve and Scale AI each hauling in at least $1 billion.

Our research also explores the growth of startups focused on marine data and drones:

Read a free preview

Webinars & Events

A reminder for later this month:

Sept. 25: We invite you to join PitchBook, J.Thelander Consulting, and Wilson Sonsini for a live discussion of compensation trends at VC and PE firms worldwide. We'll also be taking questions from our viewers. Register here.

In the News

Our insights and data featured in the press:

After its recent boom, where will private credit find the next phase of growth? [Bloomberg]

Why the market for obesity treatments could expand to $200 billion by 2031. [Reuters]

Investment in lab-grown protein last quarter reached a near-two-year high. [Axios Pro]

Private debt funds raised $91 billion during H1, roughly on pace to match last year's total. [Alternative Credit Investor]

Where healthcare-focused PE firms are shifting their attention. [Mergers & Acquisitions]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

More of our recent research (* - report preview):

Market updates

Thematic research

Industry & tech research

Coming next week (subject to change)

US PE Middle Market Report (sneak peek!)
Quantitative Perspectives: Venture Capital
Greater China Private Capital Breakdown
Emerging Tech Indicator
Pharmatech Report*
E-Commerce Report*
European unicorn outlook
Emerging Space Brief: LLM agents

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PitchBook News - Winners in the obesity drugs race

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