Investors who want to capitalize on the growing weight loss market might be tempted to turn to the current leaders in the field, Eli Lilly and Novo Nordisk. Both companies are worth serious consideration, in my view, but other drugmakers could also offer investors exposure to this area while having more diversified portfolios. Some investors might be more attracted to this value proposition. That said, here are two companies quietly making progress in the weight-loss market that may be worth investing in today: Regeneron (REGN 0.60%) and Roche (RHHBY +0.76%).
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1. Regeneron
Last year, Regeneron reported strong phase 2 results for one of its leading weight-loss candidates, trevogrumab. One thing to note about this product is that it is being developed to help minimize muscle loss in patients taking GLP-1 medicines. In the mid-stage trial, though about 33% of the weight loss in patients taking semaglutide (the generic name for Wegovy) was due to lean mass loss, trevogrumab was able to avert about half of that lean mass loss.
The advantage of Regeneron's approach with trevogrumab is that this candidate will not have to compete directly with the current leaders. Instead, it could be prescribed alongside, say, Wegovy.
NASDAQ: REGN
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That said, Regeneron is also developing a GLP-1 medicine, olatorepatide. Regeneron expects to start phase 3 studies for olatorepatide this year. Within the next couple of years, the biotech giant could make significant clinical progress with these programs. What about the rest of Regeneron's lineup? The company's most important growth driver right now is Dupixent, an eczema treatment. Regeneron also markets Eylea HD, a newer formulation of its wet age-related macular degeneration treatment.
Although the old version lost patent exclusivity, Eylea HD is slowly gaining ground and could allow the company to post stronger sales growth down the line. And, in addition, Regeneron has a vast pipeline and should launch additional products over the next few years. The company would benefit if it were successful in the weight-loss market, but its portfolio is large enough to survive disappointments in that area.
2. Roche
In January, Roche reported strong phase 2 results for one of its leading anti-obesity candidates, CT-388. The medicine showed a placebo-adjusted weight loss of 22.5% over 48 weeks at the highest dose. With the usual caveat that comparing across clinical trials always carries serious limitations, this performance looks competitive compared to the best-selling weight-loss drugs. Roche still needs to confirm these results in a phase 3 study, but the company is now a notable player in the race for next-gen obesity medicines.
OTC: RHHBY
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However, there is much more to Roche's operations than that. The Switzerland-based company has a diversified healthcare business that spans pharmaceuticals and diagnostic solutions. Within pharmaceuticals, the company has several notable growth drivers, including Ocrevus, a multiple sclerosis treatment, and Vabysmo, a therapy that competes with Eylea HD. Roche also has a deep pharmaceutical pipeline, boasting 66 new molecular entities. CT-388 would be a great addition here, but whether it pans out or not, Roche looks like an attractive stock to buy and hold onto for a while.
