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Ozempic, Wegovy, at risk due to multiple lawsuits

Effectively raises concern on CDMO opportunity for manufacturing these drugs

* With the growing sales of Glucagon-like peptide-1 (GLP-1) class of drugs, there has been increased prospects for contract manufacturing opportunities. The increasing number of indications (diabetes/weight loss) has boosted the demand for these drugs.

* However, there has been a significant increase in the number of litigations against the innovators (Novo Nordisk) for inadequate warnings about serious side-effects, especially while promoting weight loss. This raises concerns on the outlook of these drugs and subsequent CDMO opportunities.

* The US Judicial panel on multi-district litigation (JPML) has scheduled arguments on 25th Jan’24 to determine whether Multi-district litigation (MDL) can be established so that the lawsuits related to Ozempic/Wegovy can be centralized for pre-trial proceedings.

* Thereby, we remain cautious of the CDMO business opportunities for Indian pharma companies.

Significant surge in sales of GLP-1 class of drugs over the past three years

* The GLP-1 class of drugs has shown promising outcomes in treating type-2 diabetes. Particularly, Novo Nordisk introduced Ozempic (semaglutide) in early - CY18 to the US market for the treatment of type-2 diabetes. In just six years, the Ozempic global sales has reached USD12b (12M ending Sep’23). Further, given the effectiveness of Semaglutide for weight loss, Novo Nordisk has promoted it as an off-label drug under the ‘Wegovy’ brand. It was launched in Jun’21 and since then has garnered a global revenue to the tune of USD3.5b (12M ending Sep’23). Conceptually, the new class of medication (GLP-1) operates by delaying gastric emptying, promoting feelings of fullness, and encouraging users to eat less. Recently, USFDA approved Zepbound (tirzepatide) in Nov’23, a weight loss drug from Eli Lilly.

Inadequate warnings of side-effects have led to multi-district litigation on Ozempic/Wegovy

* There are certain long-term side-effects, which have raised concerns on the usage of these drugs for weight loss. USFDA, in its latest quarterly report on Adverse events (FAERS), has highlighted the correlation between the usage of GLP-1 class of drugs to incidents of suicide/suicide ideation, alopecia, and aspiration.

* The report indicated that USFDA has received 201 reports related to suicide/suicide ideation across GLP-1 set of drugs over 3M ending Sep’23. The agency is evaluating the need for a regulatory action.

* Further, USFDA also received 422 reports of alopecia over 3M ending Sep’23. Some of these reports are associated with stomach paralysis (Gastroparesis), which is believed to have been caused by the drugs’ mechanism of action, which delays emptying of the stomach. Even European regulators are conducting investigations into the potential risks related to the consumption of Ozempic/Wegovy.

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