Good old pills vie for weight-loss market

The commercial success of the injectable peptide-based weight-loss drugs marketed by Novo Nordisk and Eli Lilly and Company made one thing clear for Xiayang Qiu, a structural chemist and biotechnology company CEO: “It was too late for rival pharmaceutical companies to enter the weight-loss peptides business,” he says.

But to Qiu, being late to the peptide game doesn’t mean one can’t play in the weight-loss drug market at all. After all, the appetite for the medicines is enormous. A J.P. Morgan report estimates that the global market for glucagon-like peptide 1 (GLP-1) drugs could surpass $100 billion by 2030. By then, close to 9% of the US population could be on GLP-1 drugs, the report says.

Qiu says peptides alone cannot meet that demand. “These days, peptides are fashionable, but small molecules are the proven tradition for treating chronic diseases,” he says.

Both small biotech companies, like Qiu’s Regor Therapeutics, and industry goliaths, like Lilly, are developing small-molecule weight-loss candidates with the goal of marketing a once-a-day pill. Most pills under development target GLP-1, the same receptor that the peptide drugs target.

For industry insiders, the excitement about small molecules extends beyond creating an option for people squeamish about needles. Other pluses are low manufacturing costs and the ease of scaling up production. But some observers wonder if small molecules, despite medicinal chemists’ efforts, can ever match the peptides’ efficacy.

For Qiu, bringing a weight-loss pill to market is about providing people with options. “The patient is the key,” he says. “So let them choose what works best for them—the old-fashioned pills or the fancy peptides.”

The use of peptides as therapeutic agents began over a century ago, when the US Food and Drug Administration approved insulin for treating diabetes. Since then, over 100 other peptides have received the FDA’s nod to treat a variety of conditions or to stimulate weight loss. But the new generation of GLP-1 peptides is different.

Michael Kleinrock, lead research director at Iqvia Institute for Human Data Science, a health-care intelligence firm, attributes the commercial success of the peptides to their ability to cause dramatic weight loss. “There was already a significant unmet need in the weight-loss market, and the previous range of drugs offered weight loss in a single digit percentage of the patient’s weight,” Kleinrock says. Lilly and Novo Nordisk have both touted studies showing that their drugs provide average weight loss of well over 10%. “This was unlike anything before,” he says.

Large versus small

Novo Nordisk’s weight-loss drug contains the peptide semaglutide, and Lilly’s contains the peptide tirzepatide. The two molecules have comparable modes of action. They work by mimicking GLP-1, a hormone that helps regulate blood sugar levels, hunger, food satiety, and emptying of the stomach. The drugs reduce hunger, leading to reduced food intake and weight loss.

The FDA initially approved the peptides to treat diabetes. The agency went on to approve Novo Nordisk’s molecule in 2021 to induce weight loss in adults with “obesity” or who are “overweight” with at least one weight-related condition. Lilly’s molecule won approval for the same indications in 2023. And in the past 3 years, the FDA has approved both molecules to treat other conditions, including sleep apnea and kidney disorders.

Peptides work best when injected subcutaneously, Qiu says. If they are packed in pills and swallowed, protease enzymes in the gut quickly break them into amino acids. Peptides have another problem: they are big. As a result, they cannot penetrate the gastrointestinal barrier, a limitation that hinders their action. Novo Nordisk markets a semaglutide pill to treat diabetes, but despite technology that improves absorption in the gut, it doesn’t match the efficacy of the injectables.

In contrast, small molecules, as the name suggests, are much smaller than peptides and are easily absorbed. But designing a small molecule that can match the efficacy of peptides is laborious and time consuming. Chemists must create a molecule that is specific to the target and can cross the cell membranes without any side effects. That’s where structural chemists with computational knowledge come into play, Qiu says.

He says the molecule that his firm has developed has the potential to be as good as the peptides. The company has raised $130 million from investors and, among other projects, is testing its once-daily pill in a Phase 2 clinical trial.

In 2022, Pfizer, Qiu’s previous employer, sued him and Regor cofounder Min Zhong, also a former Pfizer staffer, claiming the two had stolen intellectual property related to the pharmaceutical giant’s small-molecule GLP-1 agonists, one of which is danuglipron. The firms settled the suit in 2023, and Pfizer is now testing danuglipron in Phase 2 trials as an antidiabetic and weight-loss drug.

The place for pills

The foundational work that jump-started the development of weight-loss pills came from Pfizer and Chugai Pharmaceutical. The research allowed other scientists to understand where small molecules interacted with GLP-1 receptors, and some of the small molecules under development are building on that work.

Several years ago, Roche held talks with Chugai, which it partly owns, about purchasing Chugai’s orforglipron. But it eventually opted out. Roche got back into the game in 2024 when it acquired Carmot Therapeutics for $2.7 billion and got Carmot’s oral GLP-1 candidate, which is in Phase 1 trials.

Orforglipron ended up with Lilly, which licensed it from Chugai in 2018. It’s now in Phase 3 trials, making it the most advanced small-molecule GLP-1 agonist. While orforglipron demonstrated weight loss in the trials, it didn’t match the efficacy of Lilly’s own range of peptide drugs. Still, Lilly seems confident about the sales of the pill, which the FDA could approve in 2026. The firm said in a recent Securities and Exchange Commission filing that it is already stockpiling over half a billion dollars’ worth of orforglipron.

Meanwhile, demand for the injectable peptides continues to skyrocket. Lilly’s sales of its weight-loss treatment, Zepbound, reached $4.9 billion in 2024, its first full year on the market. Novo Nordisk’s shot, Wegovy, generated sales of about $8 billion in 2024, compared with about $4.5 billion in 2023.

Despite these impressive figures, Emil Kuriakose, chief medical officer of Terns Pharmaceuticals, which will test a GLP-1 pill in an upcoming Phase 2 trial, is convinced that small molecules will dominate the weight-loss market in the future. The peptide drugs are geared toward creating drastic weight loss. But few options exist for a more moderate amount of weight reduction.

“There are a lot of patients . . . who don’t need to lose weight quickly,” Kuriakose says. “These patients want a simple medicine they can take by mouth and can live a normal life without side effects, and obviously without the cost of doing the injectables.”

Yet analysts caution that they are still waiting to see data on pills that match the performance of peptides.

Roger Song, a biotech stock analyst at the investment firm Jefferies, appreciates the benefits of small molecules. “Small molecules are much cheaper and easier to manufacture than peptides,” he says. He adds that globally, up to a billion people may benefit from weight-loss drugs, and peptides are nowhere close to serving that kind of demand at an affordable price. But Song says companies working on small molecules have more work to do. “Peptides have a very good clinical profile, and small molecules are not there yet.”

A soon-to-be-published report from Iqvia shows that drugmakers in the weight-loss field are paying less attention to small molecules than to peptides. Kleinrock and colleagues identified 173 weight-loss drugs under development last year, of which 71 are pills. Be they pills or peptides, most of the drug candidates are designed to target the GLP-1 receptor, Kleinrock says.

Experts say a perennial question in the debate between pills and peptides is which one people are more likely to stick with. A 2024 research letter published in JAMA Network Open on GLP-1 peptide adherence found that 36.5% of new patients discontinued the medicine after a year. The study also noted that discontinuation at the 1-year mark was highest among those with “obesity,” followed by those with type 2 diabetes only.

The peptides on the market are expensive and not always covered by insurance. Moreover, once people stop taking them, the weight often returns. “The GLP-1 peptides affect hunger, resulting in less eating. So when that peptide is gone, there will be more eating and presumably weight gain,” Kleinrock says. There isn’t enough literature comparing the adherence behaviors of people taking GLP-1-receptor-targeting pills and those taking injectables, he adds.

Some, such as Kuriakose, feel that adherence may be better with pills than with peptides, and in some cases, pills could complement peptides.

Even as Kuriakose and Qiu confidently talk about their lead weight-loss candidates, both know that Lilly’s pill will likely be the first to hit the market. Qiu calls Lilly the “800-pound gorilla” of the weight-loss industry. But given the market size, Kuriakose and Qiu see a place for many players with clinical data showing weight loss.

Both point to Lipitor, Pfizer’s cholesterol-lowering medication that was once a blockbuster drug. “Lipitor was not the first statin on the market nor the most potent drug. But it has a slightly better safety profile,” Qiu says. Of the six statins on the market, Kuriakose says, Lipitor was the fifth to launch but the most successful commercially.

Some therapeutic areas cannot be satisfied by one company alone, and weight loss is one of them, Qiu says. “I think, right now, most people trying to enter this space have accepted that they are second to market,” he says. “But even if you get a small fraction of the business, it is still a lot of money.”