On Monday, Bernstein highlighted a potential shift in the Chinese market for GLP-1 drugs used in treating obesity, suggesting domestic pharmaceutical companies could increase their market share.
The firm noted that multinational corporations (MNCs) like Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY) have historically dominated the market, but recent trends indicate a possible change.
"However, recent sales and pricing updates prompt us to consider a scenario where domestic players may benefit from share upsides, as MNCs continue to deprioritize China amidst global supply constraints," the firm said.
Despite the approval of Wegovy, Novo Nordisk's obesity treatment, five months ago, supply issues have persisted, leading to flat sales growth in the third quarter.
The analysis pointed out that Eli Lilly has yet to launch its GLP-1 drug Zepbound in China, even four months after receiving approval from the National Medical (TASE:PMCN) Products Administration (NMPA). The delay, coupled with the high launch price of Wegovy and anticipated supply constraints from both Novo and Lilly in the next one to two years, could create an opening for local companies. Innovent's mazdutide, expected to launch in early 2025, is particularly notable as it will be the first domestic GLP-1 drug with significant weight loss efficacy.
Innovent's mazdutide could be a game-changer, as it is projected to be the first domestic GLP-1 drug, excluding legacy products, with an efficacy profile competitive with global leaders. Eli Lilly, which licenses mazdutide, is also set to benefit from royalties on the drug's sales in China. This development mirrors the shift seen in the PD(L)-1 market in China, where domestic players have grown to claim a 70% share, reducing the dominance of MNCs like Keytruda.
The report suggests that the experience with PD(L)-1 market dynamics could inform expectations for the GLP-1 sector. With the history of domestic companies gaining ground in the Chinese market, there is a precedent for a similar trajectory in the GLP-1 space, especially as domestic players like Innovent prepare to introduce competitive products.
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