China’s Laekna Joins Forces with Weight-Loss Giant Lilly on Muscle-Preserving Obesity Drug in Expanding $150B Market

Eli Lilly and Hong Kong-listed Laekna announced a collaboration on an experimental obesity drug. The drug targets weight loss while preserving muscle. Several biotechs are pursuing similar goals, opening a space for growth alongside giants Lilly and Novo Nordisk, who currently dominate the weight-loss market. Regeneron and Scholar Rock are developing treatments focused on preserving muscle during weight loss. Biohaven Pharmaceutical and Roche are also exploring therapies for muscle preservation in obesity. These efforts are increasing competition in the growing obesity treatment market.

LAE102 Promises a Breakthrough in Building Lean Muscle While Reducing Unwanted Fat

United States-based Eli Lilly (LLY) and Hong Kong-listed Laekna (2105.HK) have partnered on an obesity drug. The collaboration aims to fast-track the development of Laekna’s experimental drug, LAE102. This drug supports muscle regeneration and regulates fat storage and breakdown for energy. 

Lilly will fund the drug’s development and offer its resources and expertise. However, Laekna will keep global rights and plans to conduct early-stage trials in China. Lab studies show LAE102 increases lean mass and reduces fat mass. Moreover, combining it with GLP-1 treatment may boost fat loss and restore lean mass lost during weight loss.

Lilly Targets $150 Billion Obesity Market with Muscle-Preserving Innovations

Lilly aims to solidify its leadership in the obesity treatment market, projected to reach $150 billion in revenue by 2030. Last year, Lilly spent $2 billion to acquire Versanis’ drug targeting fat cells without affecting lean mass. The acquisition focuses on bimagrumab, a monoclonal antibody designed to reduce fat mass while preserving muscle mass. The drug works by blocking proteins from binding to receptors that inhibit muscle growth, promoting fat reduction. Originally developed by Novartis for muscle disorders, bimagrumab showed promise in reducing body fat in overweight and obese adults with Type 2 diabetes.

Bimagrumab is being tested in the BELIEVE Phase IIb study (NCT05616013), both alone and in combination with Novo Nordisk’s Wegovy (semaglutide). While Novartis’ earlier trials showed limited improvements in muscle disorders, the drug’s fat-reducing effects led to its licensing to Versanis in 2021. Lilly’s acquisition aligns with its strategy to enter the growing muscle-preserving weight loss market.

Novo Nordisk and Eli Lilly Continue to Lead Obesity Drug Market as Growth Forecasts Surge, Competition Intensifies

In a report by Reuters, BMO Capital Markets forecasts the market will hit $150 billion by 2033, while Leerink is more optimistic, predicting a $158 billion value by 2032. This marks a sharp increase from earlier projections of around $100 billion. The growing consumer demand, increasing supplies, and the entry of potential rivals have contributed to these revised forecasts.

Last year, global spending on obesity drugs reached $24 billion, with expectations to rise to $131 billion by 2028. This represents a significant 27% annual growth, up from an earlier estimate of 13%. However, without wider insurance coverage, spending could fall to $39 billion by 2028, with a more likely scenario placing it at $74 billion.

Currently, Eli Lilly and Novo Nordisk dominate the market with their weight-loss drugs, Zepbound and Wegovy, respectively. These drugs have a list price of over $1,000 a month in the U.S. While both companies have been increasing production, supply shortages that hindered sales in 2023 are slowly being addressed. Analysts expect these sales constraints to resolve as manufacturing capacity expands.

The weight-loss drug market is seeing substantial investment, as drugmakers continue to develop next-generation therapies. Over 80 experimental drugs are currently in human testing. These new drugs mainly focus on mimicking GLP-1, a hormone that regulates appetite. Some drugs, like Amgen’s Maritide, also combine GLP-1 with another hormone, GIP, to enhance effectiveness.

Others, such as Lilly’s retatrutide, target glucagon, another hormone that plays a role in regulating blood sugar. Some drugs, like Novo’s amycretin, bind to GLP-1 and also target amylin, a hormone in the pancreas that controls hunger. As these drugs move through clinical trials, competition in the market is expected to intensify.

Several Other Drugmakers Compete for Share in the Growing Muscle-Preserving Weight Loss Market

Meanwhile, other companies like Regeneron (REGN.O) and Scholar Rock (SRRK.O) are developing treatments to help preserve muscle during weight loss. Specifically, Regeneron plans to target the weight loss market with antibody treatments that preserve muscle. The U.S.-based biotech’s Phase II trial focuses on developing antibody treatments that preserve muscle using two monoclonal antibodies, trevogrumab and garetosmab, which target pathways that lead to muscle degradation. Trevogrumab inhibits myostatin, a protein that hinders muscle growth, while garetosmab blocks activin A, another regulator of muscle breakdown. By combining these antibodies with incretin-based therapies, such as semaglutide and tirzepatide, Regeneron aims to preserve lean muscle mass in patients undergoing weight loss treatments.

Similarly, Scholar Rock’s experimental drug, apitegromab, originally developed for spinal muscular atrophy (SMA), has shown promise in preserving muscle during weight loss. The drug works by targeting myostatin, a protein that inhibits muscle growth, making it a potential solution for preserving muscle mass in patients using weight loss treatments like Novo Nordisk’s Wegovy. Scholar Rock is currently exploring apitegromab’s application in obesity, with a Phase 2 study expected to report results in 2025. Following a successful Phase 3 trial in SMA, which improved motor function in children, Scholar Rock’s market value soared to approximately $2.6 billion, reflecting growing optimism around its drug’s potential.

Scholar Rock is not the only company exploring myostatin inhibition for obesity and muscle preservation. Other biopharma companies, including Biohaven Pharmaceutical and Roche, are also testing similar therapies for both SMA and obesity. These companies aim to address the muscle loss associated with popular weight-loss drugs, potentially offering additional benefits. The recent success of apitegromab in SMA trials has led analysts to view myostatin-blocking therapies as a promising area for the treatment of obesity, and Scholar Rock’s findings have generated considerable interest in the field.

Amid Saturated Weight Loss Market, New Areas of Development Open Path for Competitive Growth

As patients often experience muscle loss when shedding weight through lifestyle changes, bariatric surgery, or GLP-1 drugs like Lilly’s Zepbound and Novo Nordisk’s Wegovy, a new opportunity is emerging in the competitive weight loss market. This growing focus on maintaining muscle mass while losing weight is positioning several biotechs as key players in the expanding obesity treatment space. While dominant companies lead the way, some biotechs are emphasizing the importance of preserving muscle, a common side effect of current treatments. This strategy aligns with the increasing demand for solutions that not only promote fat loss but also support muscle health during weight loss, a goal shared by multiple biotech companies exploring similar muscle-preserving therapies. As new players enter the market, pricing dynamics will shift. Companies anticipate price competition but expect higher volumes to offset price reductions. The expansion of supply and improved access to treatments could ultimately drive long-term growth in the market.

Author

Bernice Lottering