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Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future of Pain Management by EOS Intelligence
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Mind over Matter: How Non-invasive Neuromodulation Is Becoming the Future of Pain Management and Beyond

Scientists have been researching the possibility of using electrical impulses to treat many health conditions. The starting point was the introduction of the first TENS (transcutaneous electrical nerve stimulation) device in the 1970s in the USA. Its goal was to test the tolerance of chronic pain patients to electrical stimulation. In recent years, non-invasive neuromodulation has emerged as a promising field for treating various neurological disorders. This field will likely experience significant growth in the coming decade, thanks to technological advancements, such as AI-powered sophisticated wearables.

Non-invasive neuromodulation is emerging as a novel treatment for several diseases

Non-invasive neuromodulation is a technique that uses external devices to apply electromagnetic fields, electrical currents, or other forms of stimulation to the brain to enable targeted modulation of neural activity.

The technique is effective in treating a range of conditions. Currently, several devices are available in the market for treating illnesses, including chronic pain, tinnitus, diabetic neuropathy, and functional disorders such as bladder and bowel control.

The non-invasive neuromodulation market encompasses a diverse array of devices that can modify neural activity without the need for invasive procedures. This includes transcranial magnetic stimulation (TMS), transcranial direct current stimulation (tDCS), and TENS.

TMS therapy sessions typically require the presence of a physician. An example is MagVenture Pain Therapy, a TMS device developed by a Denmark-based company, MagVenture, for treating chronic pain.

TENS and tDCS devices are portable and, hence, suitable for at-home treatments. The FDA has not yet approved tDCS in the USA for medical use. However, its use falls under the Investigational Device Exception (IDA) regulations. Though it is marketed for non-medical uses in the USA, it is used for medical treatment in regions such as the EU, Singapore, and Israel.

TENS devices are small, battery-powered devices that consist of leads that connect to electrodes, sticky pads placed on the skin in the area that needs stimulation. An example is Cefaly, an FDA-approved TENS device developed by the US-based Cefaly Technology for pain management. This device works by stimulating and desensitizing the primary source of migraine pain, the trigeminal nerve, using a precise electrical impulse.

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

The non-invasive neuromodulation market is showing rapid growth

The global non-invasive neuromodulation devices market for neurological and psychiatric disorders was approximately US$1.2 billion in 2022. According to a 2023 report by Report Prime, an India-based market research firm, the market is projected to grow at a CAGR of 7.2% from 2023 to 2030, reaching US$2.1 billion by 2030.

Several reasons fuel this rapid growth in recent years, including the increasing prevalence of chronic pain and other neurological conditions (especially in older patients), the numerous advantages this technique has over invasive neuromodulation, breakthroughs in non-invasive technology, and a surge in investments.

Increasing incidence of neurological disorders is a major driver

The increasing incidence of debilitating disorders such as chronic pain, Parkinson’s disease, diabetic neuropathy, etc., is creating a pressing need for new and efficient treatments to address these conditions. A 2023 study by the CDC indicated that 20.9% of American adults suffered from chronic pain, and 6.9% experienced chronic pain that significantly limited their daily activities.

Similarly, Parkinson’s disease affects nearly 1 million people in the USA as of 2023, with this number expected to rise to 1.2 million by 2030. These statistics indicate a rising trend of neurological disease burden in the USA.

One major issue that many patients and physicians face is that the current treatments for many of these conditions fall short, leaving a significant gap in the care of patients. Typically, doctors treat people suffering from chronic pain, including that of diabetic neuropathy, using painkillers. Most patients develop medicine tolerance, experience drug-wearing-off effects, or suffer from severe side effects, diminishing the overall treatment effectiveness.

Some patients may even consider drastic and irreversible surgical procedures, such as nerve amputation, due to inadequate treatment results. However, even these may not always provide the desired relief. This indicates the need for a reliable and effective solution for managing the pain, discomfort, and other neurological symptoms associated with the primary disease.

As non-invasive neuromodulation stimulates the brain areas responsible for pain processing, it alters the patient’s perception of pain. With the growing incidence of neurological disorders, this desired neuromodulation effect will continue to be in high demand, contributing to the growth of the non-invasive neuromodulation devices market.

Non-invasive treatments offer advantages over other techniques

Typically, conditions such as chronic pain are treated using a combination of prescription medicines. However, these medications, including NSAIDs, opioids, etc., come with a variety of side effects, such as digestive issues, ulcers, drowsiness, etc. Long-term use of opioids can lead to a range of negative consequences, including the development of tolerance, physical dependence, and opioid use disorder, increasing the risk of overdose and death. Conventional treatment methods also need frequent hospital visits.

Invasive neuromodulation is an effective treatment option for various neurological conditions. However, it also carries significant risks, such as site infections, perioperative and postoperative complications, blood clots, and device malfunctions. Additionally, these techniques often require multiple hospital visits.

In contrast, non-invasive neuromodulation offers several advantages over invasive methods. These wearable devices provide drug-free treatments that do not require surgery or complex installation. As a result, they are easy for patients and physicians to use.

A comprehensive study about the efficacy of various non-invasive devices is not yet available. However, controlled individual studies by companies and developers have shown promising efficiency in treating various diseases.

Moreover, a 2019 report published in BMJ, a peer-reviewed medical journal, indicated that non-invasive neuromodulation offers a potential solution for patients who are sensitive to traditional treatments. This includes patient groups such as pregnant women, adolescents, and those who experience poor tolerability or lack of efficacy from pharmacological treatment therapies.

The need to treat health conditions of these patient groups may drive the use of non-invasive devices to treat health conditions.

Scientific advancements help improve efficacy and expand applications

The non-invasive neuromodulation field has seen several breakthroughs in recent years, showing promise for accelerated R&D and new and improved devices potentially entering the market in the future.

One example is the proprietary magnetic peripheral nerve stimulation (mPNS), marketed as Axon Therapy, developed in 2023 by US-based Neuralace Medical for managing painful diabetic neuropathy.

Another example is vibrotactile stimulation (VTS), currently under development by an interdisciplinary research team from the University of Minnesota as a treatment for spasmodic torticollis or cervical dystonia. This is a painful neurological condition that affects the neck. Though the product is not yet marketable, the clinical trials are showing significant promise.

VTS devices are also being developed for conditions other than pain. An example is the VTS glove, a wearable device developed by researchers at Stanford University and the Georgia Institute of Technology in 2024. The device applies high-frequency vibrations to the hands and fingers to relieve uncontrollable arm and hand spasms. In clinical trials, patients who used the device experienced significant improvements in symptoms, with some even reporting a reduction in their use of oral medications. The team is now working to develop the device further and make it available to patients as a publicly available therapy.

Furthermore, a new treatment for tinnitus, known as bimodal neuromodulation, which involves stimulating two sensory pathways in the brain, has been developed. Ireland-based company Neuromod offers the Lenire device, which combines headphones and a mouthpiece to deliver auditory and tactile stimuli to alleviate symptoms. Patients wear the device for an hour daily, for at least six weeks, to stimulate the tongue with electrical impulses while listening to tones.

These new developments are likely to give momentum to the ongoing R&D in the sector.

Increased investment signals growing market potential

The sector has also seen an uptick in investments. For example, Nalu Medical, a US-based company, secured US$65 million in funding in 2024 to advance its neurostimulation technology for treating chronic pain.

Similarly, Avation Medical, a US-based company focusing on treating bladder issues, raised over US$22 million in 2024 to launch the Vivally System. This wearable device treats patients with urge urinary incontinence (UUI) and overactive bladder (OAB) syndrome.

Massachusetts–based Cognito Therapeutics, a company focused on developing a new therapy for Alzheimer’s disease, raised around US$73 million in 2023.

This increasing trend in R&D investments shows investors’ rising interest in the field of non-invasive neuromodulation, indicating promising market prospects.

Integration with AI is expected to pave the way for future developments

Non-invasive neuromodulation is seeing considerable success in developing closed-loop systems that leverage artificial intelligence (AI) and machine learning (ML) to give customized therapeutic output. This trend is likely to see more growth, especially with the rapid advancements in the field of AI.

An example is Avation Medical’s Vivally System, a wearable neuromodulation device that uses closed-loop, autonomously adjusted electrical stimulation to treat patients with UUI and OAB syndrome. The device uses a smartphone app to calibrate itself for each patient and then delivers a constant current of electrical stimulation through a wearable garment. It also uses an advanced AI-powered closed-loop algorithm and electromyography (a medical test that measures the electrical signals sent by nerves to muscles and received back from them) to enable continuous real-time monitoring and therapy adjustment, ensuring uniformity and safety.

Non-invasive neuromodulation device companies are forming partnerships with research institutes to develop safe ways to treat various disorders using generative AI neuromodulation.

One such collaboration started in June 2024 between US-Swiss generative neuromodulation firm, Dandelion Science and Geneva-based research institute Wyss Center for Bio and Neuroengineering. The goal is to develop a generative AI neuromodulation platform for treating neurodegenerative and neuropsychiatric disorders.

Similar collaborations are likely to commence in the future, as it is clear that the combination of neuromodulation and AI is set to impact various treatment fields significantly.

Expansion of insurance coverage could boost treatment accessibility

Conventionally, chronic pain treatment involves a combination of drugs and physical therapy. The US patient usually pays 20% of their Medicare-approved amount. People with severe pain spend about US$7,700 on annual healthcare expenditures, and with insurance, they have to spend around US$1,600 annually. For the management of pain conditions such as migraine, the out-of-pocket expense can increase to 30% of their Medicare-approved amount.

Non-invasive neuromodulation treatment has proved to be more cost-effective than conventional treatments. Although many non-invasive pain management devices are not covered by insurance, some are eligible for reimbursement.

For instance, Nerivio, a wearable device for treating migraine, is covered by Medicaid and Highmark Insurance. Moreover, Theranica, Nerivio’s Israel-based parent company, introduced the Nerivio Savings Program in October 2020 to help US patients access the device. It is a reimbursement plan that allows patients to receive their first device for a copay of up to US$49 (for 18 treatments), depending on their insurance coverage. The refill costs US$89 for those without insurance.

Additionally, patients may be able to use Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to pay for specific approved devices. An example is Cefaly, for which, though not covered by insurance in the USA, consumers can use HSA and FSA funds or finance their purchase with Affirm (a US-based financial technology company that offers flexible payment options) for US$36 per month upon qualifying. Without insurance or other financial aid, the upfront cost varies from US$330 to US$430, and an additional US$25 for three reusable electrodes, each usable up to 20 times each.

Non-invasive neuromodulation devices’ high upfront cost remains the key barrier to broader adoption 

Overall, non-invasive neuromodulation devices offer a more cost-effective option than other treatments. The most significant barrier for patients opting for non-invasive neuromodulation is the high upfront cost, especially with no insurance coverage.

For example, Israel-based Zida Therapeutics’ Zida Control Sock, a device to treat urinary incontinence, comes with an upfront cost of US$750. Without insurance, many people may find it challenging to cover this cost. This is particularly true for older adults whom conditions such as chronic pain and urinary incontinence affect the most. According to 2023 data released by the US Census Bureau, 14.1% of Americans aged 65 and older live in poverty, making these devices less accessible to them without insurance coverage.

However, this situation may improve as several companies are now in talks to receive insurance coverage for their devices. With an increase in R&D, companies can also offer robust evidence to demonstrate the effectiveness and long-term safety of the devices, prompting insurance companies to provide coverage.

With reimbursement available for companies such as Theranica and Zida, and with several other companies such as Neurovalens planning to enter discussions with insurance providers to achieve reimbursement status, the accessibility has a chance to improve in the near future. This will likely drive adoption in the coming years.

EOS Perspective

Adopting non-invasive devices will likely increase as a standalone treatment and adjunct therapy. While non-invasive treatments currently focus on conditions such as chronic pain, tinnitus, urinary incontinence, etc., experts believe that this will soon expand into other neurological conditions, including ALS, and Parkinson’s disease.

Currently, there are only seven FDA-approved drugs for ALS treatment, all of them with limited effectiveness. The significant unmet need in this field presents a compelling opportunity for non-invasive neuromodulation companies. PathMaker Neurosystems is among the few companies conducting feasibility studies and developing non-invasive neuromodulation treatment options for ALS patients.

Research is also underway to develop a non-invasive treatment for Parkinson’s disease, which was previously treated using invasive techniques. Czech Republic-based STIMVIA has reported promising results from its initial pilot study of a new treatment for patients with Parkinson’s disease as an add-on therapy.

Several new non-invasive devices are also in the development pipeline, and their clinical trials are promising. An example that has shown positive results in a pivotal trial is a treatment for improving upper limb function by Netherlands-based ONWARD Medicals.

Non-invasive neuromodulation has the potential to revolutionize the treatment of chronic pain and other neurological disorders. As the field continues to evolve, with advancements in AI-powered wearables and increased investment in R&D, we can expect to see even more innovative solutions emerge in the coming years.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence
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Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape?

Many biopharmaceutical companies, such as AriBio, Annovis Bio, Athira Pharma, Cassava Sciences, and Alzheon, specializing in treating neurodegenerative diseases, are developing drugs for Alzheimer’s disease (AD) that are currently in phase 3 of clinical trials. If approved, these drugs can ameliorate the AD treatment approaches to a considerable extent. A major prerequisite to this is for concerned authorities to take concrete steps to fast-track clinical trials and increase AD research investment.

With only a 1% success rate of clinical trials in drug development until 2019, the AD treatment gap is alarming. A 99% failure rate means there is a very limited influx of new, more effective, and more advanced AD drugs into the market, and the gap between available treatment options and the rising number of AD cases is increasing.

The disease burden of Alzheimer’s will rise from US$1.3 trillion in 2020 to US$2.8 trillion by 2030 globally. With the rise in the aging population across the globe, the estimated number of AD patients will increase from 55 million in 2020 to 78 million in 2030.

However, recent drug approvals, such as Elli Lilly’s Kisunla (Donanemab) in July 2024 and Biogen/Eisai’s Leqembi (Lecanemab) in January 2023, bring a ray of hope for a new approach to AD treatment.

Initial hopes for new drugs can be premature

New drugs do enter the market from time to time. However, their impact on AD treatment in the long term is not always significant. An example of this is Biogen’s Aduhelm. Based on its ability to reduce amyloid protein in the brain, the FDA approved Aduhelm (Aducanumab) in 2021 in an accelerated approval route for AD treatment.

However, in 2024, Biogen discontinued the drug in the alleged desire to reprioritize its resources in AD treatment. Experts cite weak clinical evidence for efficacy, serious side effect risks, a high price point, and poor sales among the many reasons for Aduhelm’s withdrawal from the market.

AD drug candidates succumb to clinical failures

Eisai and Biogen have been working together since 2014 to develop and commercialize AD drugs. However, they have faced clinical drug failures, similarly to many other pharmaceutical companies during that time. For instance, they had to terminate Elenbecestat, one of their AD drugs, in phase 2 clinical trial in 2019 following an unfavorable risk-benefit ratio finding by the Data Safety Monitoring Board (DSMB).

Eisai launched its first AD drug, Aricept, an acetylcholinesterase inhibitor, in the USA in 1997 in collaboration with Pfizer. The annual peak sales of Aricept were US$2.74 billion before its patent expiry in 2010. However, Pfizer exited neuroscience drug research and development in 2018 after the failure of its AD drug candidates, such as Dimebon and Bapineuzumab.

Clinical challenges in Alzheimer’s research and reallocation of resources were among the other reasons for Pfizer’s exit from neuroscience R&D and drug development. Nevertheless, Pfizer did not desert the neuroscience space completely, rather forged a spin-off company called Cerevel Therapeutics in partnership with Bain Capital.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Recent drug launches focus on amyloid beta targeting mechanism

In January 2023, the FDA approved Leqembi (Lecanemab), a drug by Biogen and Eisai, for AD treatment. It is a monoclonal antibody that clears away the amyloid beta plaques known to cause cognitive impairment in AD patients. With MHRA’s (Medicines and Healthcare Products Regulatory Agency) approval of Leqembi, Great Britain becomes the first European country to authorize the drug for the treatment of early-stage AD as of August 2024.

In July 2024, the FDA approved Kisunla (Donanemab) by Eli Lilly to treat early-stage AD. The drug’s mechanism of action is the same principle as that of Leqembi, an amyloid beta protein plaque targeting mechanism. Kisunla becomes the third anti-amyloid drug approved for AD treatment, following Aduhelm (now discontinued) and Leqembi. Both Kisunla and Leqembi drugs carry the risks of the formation of temporary lumps in the brain that can be fatal. Therefore, physicians advise regular brain MRIs to alleviate this risk. Neurologists and researchers are in disagreement over whether the benefits offered by these drugs are clinically meaningful.

Researchers are still studying the side effects of these two drugs. Prescribing them requires confirmation of the presence of amyloid protein in the brain. Therefore, PET scans and CSF tests are required before such a prescription.

The FDA has approved both drugs in the USA for intravenous infusions (IV) in the early stages of AD. Kisunla is administered every four weeks instead of every two for Leqembi. Therefore, Kisunla offers greater convenience compared to Leqembi.

Experts from Bloomberg Intelligence suggest that Eli Lilly will likely surpass Biogen and Eisai’s reign at the top of the AD drug market by capturing around 50% of the US$13 billion market globally by 2030. This is partly because of Kisunla’s convenient dosing and the fact that AD patients can stop taking the drug after the amyloid levels touch the clearance threshold.

Newer therapeutic approach-based drugs are in phase 3 clinical trials

Apart from the amyloid beta therapeutic approach, AD researchers are exploring the role of other mechanisms in AD treatment, such as anti-tau antibodies, neurotransmitter receptors, and synaptic plasticity or neuroprotection. Drugs based on these mechanisms are currently in phase 3 of clinical trials.

The Washington University School of Medicine’s DIAN-TU (Dominantly Inherited Alzheimer Network Trials Unit) trial is testing Lecanemab plus Eisai’s investigational anti-tau antibody E2814 in patients with early-onset AD caused by a genetic mutation. E2814 prevents the spreading of tau seeds in the brains of AD patients. This drug is in phase 3 clinical trial. The clinical study commenced in June 2024 and will complete by November 2029.

ACP-204 by Acadia Pharmaceuticals is also in phase 3 clinical trial for AD. The agent acts as an inverse agonist at the 5-HT2A serotonin receptor. FDA has approved Acadia’s previous 5-HT2A inverse agonist, Nuplazid, for Parkinson’s disease psychosis. ACP-204 will be the first drug for AD treatment in Acadia’s product portfolio if approved.

Another drug in phase 3 trial is AriBio’s AR1001, a phosphodiesterase-5 (PDE5) inhibitor. Apart from AR1001, two more AD drugs are in AriBio’s pipeline, AR1002 and AR1003 that are currently under the investigational new drug-enabling stage of clinical trials.

For better patient outcomes, researchers are attempting to develop AD drugs with non-invasive modes of administration that are likely to be less expensive and equally effective compared to AD drugs administered intravenously.

The safety and effectiveness of oral therapy candidate Buntanetap, developed by Annovis Bio, are comparable in people with early onset AD regardless of whether they do or do not carry a genetic risk factor APOE4. That is according to new data from a phase 2/3 clinical trial that tested three doses of Buntanetap against a placebo in more than 300 patients with the neurodegenerative disease. Buntanetap modulates protein production to reduce clumping. The competitive advantage of Annovis Bio over its peers is the fact that Buntanetap targets multiple proteins in the brain, such as amyloid beta, tau, alpha-synuclein, and TDP43, making it more effective than AD drugs that target a single protein.

Apart from Buntanetap, Annovis Bio has another oral drug to treat advanced AD and dementia in its pipeline, ANVS301, which is in phase 1 of clinical trial. In July 2024, Annovis Bio received FDA approval to transition to a new solid form of Buntanetap in future clinical trials allowing the company to refine its drug formulation, potentially improving its efficacy and safety profiles.

Another promising AD drug candidate, Fosgonimeton by Athira Pharma, is a small-molecule positive modulator of the hepatocyte growth factor (HGF) system, previously showing neuroprotective, neurotrophic, and anti-inflammatory effects in preclinical models of dementia. This drug is in phase 3 clinical trial. Athira Pharma ended 2023 with a strong balance sheet, signaling its better financial position to augment its ongoing pipeline development.

Eli Lilly’s new drug Remternetug works as pyroglutamyl (3)-amyloid beta-protein (3-42) inhibitors, positioning it as a promising AD drug. Remternetug will join Eli Lilly’s portfolio as a second AD drug if approved.

Simufilam by Cassava Sciences is a proprietary, small-molecule oral drug that restores the normal shape and function of altered filamin A (FLNA), a scaffolding protein, in the brain. It is now in phase 3 clinical study to test this new and promising scientific approach to treating and diagnosing AD. The mechanism of action of this drug involves stabilizing a critical protein in the brain instead of removing it. This novel approach distinguishes Cassava Sciences’ drug from other treatments that predominantly focus on amyloid-beta or tau proteins. In May 2024, Cassava Sciences raised US$125 million by selling its stock to shareholders. The funds will be utilized for the continued development of Simufilam.

Valiltramiprosate by Alzheon is potentially the first oral disease-modifying treatment for AD. Valiltramiprosate is well differentiated from plaque-clearing antibodies in development for AD due to its novel mechanism of action, oral mode of administration, and potential efficacy in a genetically targeted population. In October 2017, Valiltramiprosate/ALZ-801 received FDA Fast Track designation for AD investigation. Due to Alzheon’s significant progress in AD drug development, the company has attracted a lot of investors since 2022. Alzheon received US$100 million in June 2024 in Series E venture capital funding which will be utilized to further develop and commercialize Valiltramiprosate. This is in addition to US$50 million received in series D round of funding in 2022.

Big names dominate the competition, with clinical trials in progress by smaller biopharma players

On the competitive landscape front, the AD drug market is highly competitive, with many pharmaceutical companies financing R&D to engineer new drugs that could potentially delay the progression of AD and/or restore neuronal health. The global AD therapeutics market size was US$4.8 billion in 2023 and will surpass US$7.5 billion by 2031, as per Towards Healthcare, a healthcare consulting firm.

A couple of large players still dominate the global AD therapeutics market. Interestingly, they are not the only ones active in the AD treatment development, as several smaller biopharmaceutical companies that specialize in neurodegenerative disease treatment are working on AD drugs (many currently in phase 3 of clinical trials).

High R&D costs are a considerable factor in slowing the progress down

Between 1995 and 2021, the cumulative private spend (total R&D expenditure by pharmaceutical companies, does not include federal funding) on clinical stage R&D for AD was US$42.5 billion, with the largest share of 57% (US$24.1 billion) incurred during phase 3. During the same period, the FDA approved 878 drugs across all therapeutic areas; only six of these drugs were for AD treatment (four cholinesterase inhibitors [ChEIs], memantine, and aducanumab). These statistics speak volumes of the complex, expensive, time-consuming, and predominantly unsuccessful nature of AD clinical trials. This ultimately leads to exorbitant prices of AD drugs.

A range of factors drive the R&D costs and, in turn, the price of AD drugs. A significant component here is patient screening, which contributes to 50-70% of the cost. Patient recruitment and retention are also challenging, given the considerable length of such trials.

Moreover, patient recruitment challenges stunt the progress of AD clinical trials. The recruitment rate for AD clinical trials is as low as one patient per site per month. In terms of eligibility, 99% of AD patients who are eligible for participation in a clinical trial never consider taking part. This further increases the time taken to conduct AD clinical trials.

EOS Perspective

After decades of failure in clinical trials, two anti-amyloid AD drugs, Kisunla and Leqembi, are available in the market, forming a duopoly in the USA. There are several promising drugs in phase 3 clinical trials with a new mechanism of action apart from amyloid beta protein inhibitors. However, the disease management landscape is prone to unforeseen changes, such as the withdrawal of drugs owing to safety, efficacy, and pricing issues.

The AD treatment landscape faces challenges such as drug inefficacy, complex pathophysiology of AD, expensive and time-consuming clinical trials, delays in diagnosis by physicians, behavioral changes and deteriorating mental health of AD patients, and severe side effects of medications. These challenges will continue to impede the development of new disease management approaches.

An issue that is very likely to continue to challenge progress in developing better treatment options for AD is the severe lack of funding. Dementia research is extremely underfunded compared to HIV/AIDS, cancer, and COVID-19 in the USA. Irrespective of the fact that the deaths attributed to AD are on par with cancer, the difference between the annual US federal government funding for AD vis-à-vis cancer is strikingly huge.

AD drug development is a tough market to operate in. The ongoing issue with AD research funding persists, and there do not seem to be changes in federal funding soon. On top of that, the slow progress in successful R&D and many failed clinical research trials will likely make private-sector investors hesitate or withdraw.

In addition to this, AD drug manufacturers will also continue to face the challenge of low to modest drug sales due to poor adoption rates stemming from issues like restricted coverage.

As of June 2023, Medicare was covering AD drugs that slow down the progress of the disease provided a physician agrees to the collection of real-world evidence of these AD drugs, as per the Centers for Medicare & Medicaid Services (CMS). However, there is a significant underlying problem with drugs for AD treatment. When the drug finally enters the market, patients cannot afford the treatment, and the coverage is restricted and sometimes withdrawn. There is no foreseeable change to this impasse, and hence, the AD treatment development is likely to be slow.

If reimbursement of AD drugs is removed, patients are likely to stop administering AD drugs altogether and adopt alternative healthcare resources such as antidepressants, as found in a 2021 study by researchers from Paris-Saclay University and Memory Center of Sainte Périne Hospital in France.

The reluctance of payers to cover the treatment cost for AD is influenced by several factors beyond just the high cost of the drug. Factors include cost-effectiveness of treatments, uncertain long-term safety and efficacy benefits of treatments, clinical guidelines and recommendations, availability of alternative treatments including generics (from drug makers such as Cadila, Cipla, Dr. Reddy’s, among others), and regulatory and reimbursement policies.

The future of AD treatment approaches will continue to remain bleak, and patients will be left with only a few available drug options unless the right authorities set out a plan for fast-track clinical trial processes, increase AD research investment, and support broader insurance coverage.

Pharma Companies Navigate Their Way through Ac-225 amidst Supply Constraints by EOS Intelligence
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Pharma Companies Navigate Their Way through Ac-225 amidst Supply Constraints

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Pharma companies have been increasingly investing in developing targeted alpha therapies for cancer treatment, using alpha-emitting isotopes such as Ac-225. However, the current supply for Ac-225 is limited, and thus, companies are working towards securing their supply chain. The recent investment by Eli Lilly in isotope manufacturer Ionetix brings to light the increasing interest of large pharmaceutical companies in Ac-225 and its uninterrupted supply for their pipelines. Similar to Eli Lilly, several other companies have strategically invested in or partnered with manufacturers to ensure a guaranteed supply.

Ac-225 is pegged as a promising isotope for next-generation cancer treatment

Among the recent advances in cancer therapies, only a few have shown as much promise as targeted alpha therapies have. Targeted alpha therapies (TAT) involve using alpha-emitting isotopes to selectively target and destroy cancerous tissue without causing significant damage to surrounding healthy tissue. This is facilitated by the short range of alpha radiation in human tissue (less than 0.1 mm), which corresponds to less than 10 cell diameters. Moreover, they are characterized by high energy levels (5-9 MeV), which results in the selective destruction of malignant cells.

Several alpha-emitting isotopes are currently being explored for TAT, the most common among them being Ac-225, At-211, Pb-212, and Bi-213. Of these, Ac-225 (actinium-225) is considered the most potent medical-grade radioisotope as it has a high decay energy of 5.9 MeV and a half-life of 10 days. It is the isotope of choice in several clinical trials, with about 15 Ac-225-based ongoing clinical trials currently in the USA. However, despite having substantial potential for developing next-generation treatments in the cancer space, their adoption has been slow, given the short supply of the isotope.

Ac-225 is not naturally available and is derived from Th-229 (thorium-229), a byproduct of uranium-233 (U-233), which is a leftover from the production of atomic weapons in the 1950s and 1960s. The initial batch of Ac-225 has been supplied by the US Department of Energy (DOE). However, the supply cannot keep up with the growing demand for trials.

Isotope producers invest to accelerate Ac-225 supply in the future

Currently, there are two commercialized routes to produce Ac-225. As mentioned above, the first and traditional route involves separating Ac-225 from Th-229, derived from the US government’s legacy reserves of U-233. The US government holds about 453kg of U-233, of which only about 256kg is of high quality and will produce about 24g of medical-grade thorium.

The government had previously started a program that extracted a small amount (150mCi) of Th-229, which produced about 1.2 Ci of Ac-225 per annum, enough to treat 1,200 patients. However, in 2019, the US DOE entered into a public-private partnership with Terra Power and Isotek to downblend its stock of U-233 to extract Th-229, which can further be used to develop Ac-225. In 2021, TerraPower entered into an agreement with Cardinal Health, a US-based commercial alpha contract manufacturing organization (CMO), to develop and produce Ac-225 for drug development commercial sales. This will likely significantly improve the supply of Ac-225 in the long run.

The other route to produce Ac-225 is through cyclotron production, which involves irradiating a Ra-226 (Radium-226) target with a proton and knocking off two neutrons. Several isotope manufacturers are adopting this technology and are working on increasing their manufacturing capacity.

Niowave, a US-based supplier of medical and industrial radioisotopes, uses a closed-loop cycle to produce high-purity Ac-225 and other alpha emitters from Ra-226 using a superconducting electron linear accelerator. Similarly, Ionetix, a leading cyclotron technology innovator and isotope manufacturer, uses the same technology to produce Ac-225 and managed to produce its first batch of Ac-225 in June 2024. The company commissioned its first cyclotron at its current facility in 2023, while it aims to install and commission a second cyclotron there in early 2025. By 2025, it is expected that the company will be able to produce about 1Ci per week. The company also aims to establish another site in the USA for Ac-225 production in 2026.

While isotope manufacturers are strategically working to enhance the production of Ac-225 in the long run, the current supply, which is required to fuel the ongoing clinical trials using Ac-225, is quite limited. In 2024, the worldwide supply of Ac-225 is estimated to be about 2Ci per annum, which is merely enough to treat 2,000 patients.

Pharma companies invest in securing their Ac-225 supply chain

Given its currently limited availability and immense potential, leading pharmaceutical players are adopting various strategies to secure their Ac-225 supply to support their targeted alpha therapies drug pipelines. Several leading players, such as Fusion Pharmaceuticals, Telix Pharmaceuticals, and Bayer, are actively working on partnering with companies producing Ac-225 to overcome supply-related challenges for their trials. Recently, a leading pharmaceutical company, Eli Lilly, also joined the bandwagon and secured its supply of the actinium isotope.

Fusion, which has three Ac-225-based drugs currently under trial, was one of the first movers in this regard and has inked several partner agreements to ensure a smooth supply.

In December 2020, Fusion entered into a partnership with TRIUMF, Canada’s national particle accelerator center. In this partnership, Fusion would provide the latter with up to US$18.5 million (CA$25 million) to upgrade its production facilities and scale up production of Ac-225. In return, Fusion would receive preferred access and pricing to the resulting isotope.

In June 2022, Fusion collaborated with Niowave, a US radioisotope manufacturer. Under the agreement, Fusion would invest up to US$5 million in Niowave to further develop their technology to increase their production capacity of Ac-225. In return, Fusion will be guaranteed access to a pre-determined percentage of Niowave’s capacity of the resulting Ac-225, as well as preferred access to any excess stock produced.

In November 2023, Fusion entered into an agreement with BWXT Medical, a US-based supplier of nuclear components and a subsidiary of BWX Technologies. Under the agreement, the latter agreed to provide Fusion with a preferential supply of Ra-225 (parent isotope of Ac-225) and access to high-specific activity generator technology. This would enable Fusion to produce Ac-225 at its own manufacturing facility for use in clinical trials. In addition, BMXT Medical provides Fusion with predetermined amounts of its actinium supply needs under a preferred partner agreement.

Another leading radiopharmaceutical player, Telix Pharmaceuticals, entered into an agreement with Cardinal Health in May 2024 to supply Ac-225 globally.

Similarly, in February 2024, Bayer signed an agreement with PanTera (a Belgian radioisotope production JV created by Ion Beam Applications and SCK CEN) to secure large-scale production of Ac-225. PanTera uses both the Ra-226 and Th-229 production mechanisms to produce Ac-225. It is collaborating with TerraPower to supply Th-229.

Eli Lilly, the largest pharmaceutical company globally, has also recently invested in a nuclear isotope manufacturing company, Ionetix, in August 2024. Eli Lilly has made a US$10 million convertible loan investment in the company to secure its supply of Ac-225. Moreover, PointBiopharma, which was acquired by Eli Lilly in 2023, also had a previous US$10 million investment in Ionetix, resulting in Eli Lilly holding a total of US$20 million debt facility with Ionetix. The pharma giant has the option to convert this debt into equity when Ionetix’s valuation exceeds US$300 million.

These investments by Eli Lilly and Fusion Pharmaceuticals are rare cases where major pharmaceutical companies are investing up the supply chain to secure actinium availability for their cutting-edge drug pipelines.

EOS Perspective

While targeted alpha therapies are emerging as high-potential next-generation cancer drugs, they are plagued by supply constraints of alpha-emitting isotopes, especially Ac-225. Thus, companies seeing great promise in these therapies must work towards securing their supply of these isotopes to ensure the smooth running of their clinical trials.

In the past, large pharmaceutical companies such as BMS have had to halt enrolment in their clinical trials due to the non-availability of Ac-225. Such interruptions not only delay the entire clinical trial but also have significant cost implications and could jeopardize its overall success.

Considering these limitations, it is imperative that pharmaceutical companies with ongoing or planned Ac-225-based trials invest in ensuring a guaranteed supply of the isotope for the entirety of their trial and future production of the drug once approved. While several companies are merely entering into supply agreements with isotope manufacturers, others are taking it one step ahead and investing in their upstream suppliers. Moreover, some companies, such as Fusion and now BMS, are advancing towards building on-site production of Ac-225.

That being said, establishing a secure supply chain of Ac-225 comes with its own set of costs and risks. Most pharmaceutical companies are undertaking significant investments (ranging between US$5-25 million) to guarantee their supply of Ac-225.

However, as a cancer therapy, TAT is in the nascent stages of development, and most trials utilizing Ac-225 are still in either phase 1 or phase 1/2, far from FDA approval. Moreover, the only Ac-225-based trial in phase 3 is being conducted by BMS for neuroendocrine cancer and is currently halted due to supply issues. Given the nascency and early stages of development of this treatment, it is too soon to predict if these heavy investments into Ac-225 would result in the development of FDA-approved drugs and bring sufficient returns. This risk can have particularly dire consequences for small players.

Thus, while companies looking to develop targeted alpha therapies using Ac-225 must work to secure their supply, their level of investment must remain in sober relation to their size, pipeline, and financial position.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence
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IRA: Are Patients Winning at the Cost of the US Pharma Sectoral Growth?

The market reaction to the US Inflation Reduction Act of 2022 is mostly mixed. It is expected to change the pharma industry dynamics in terms of the competitive positioning and product pricing of those companies projected to be negatively impacted by the IRA. The answer to whether the IRA will be able to curb rising healthcare costs in the USA lies in the legislation’s on-the-ground application.

IRA to decrease prescription drug prices via a four-pronged strategy

Prices of prescription drugs in the USA are 2.78 times higher than in 33 other countries analyzed in a 2024 report published by RAND, a public policy think tank.

In pursuit of reducing healthcare costs in the USA, the Biden government passed the Inflation Reduction Act (IRA) in August 2022. One of the major goals of the act includes the reduction of prices of prescription drugs.

This is expected to be achieved through a four-pronged strategy, the mainstay of which involves the US federal government negotiating the prices of some high-priced prescription drugs covered under Medicare.

The second prong includes pharmaceutical firms paying a rebate to Medicare if they raise the price of prescription medicines covered under Medicare by a rate that is higher than the inflation rate.

The monthly cost of insulin for Medicare patients is capped at US$35, as the third prong.

The fourth prong aims to reduce prescription drug prices by capping the out-of-pocket costs of Medicare Part D patients at US$4,000 in 2024 and US$2,000 in 2025.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

Pharma companies to suffer more due to IRA compared to projected government savings

Under the IRA, large pharmaceutical companies, defined as those with over US$1 billion in net profits, are required to pay a minimum of 15% annual taxes, a financial burden on these companies. Analysts predict that the annual revenue from corporate taxes could be to the tune of US$222 billion. Furthermore, the IRA is expected to save over US$287 billion for ten years from the roll-out, as per the estimates of the Congressional Budget Office (CBO).

Apart from the increased financial burden on some companies, experts foresee potential adverse impact on several pharmaceutical companies based in the USA to a considerable extent.

The pharma companies witnessing the least to no impact are the ones with their primary operations based outside the USA, biologics or large molecule drug producers, and the ones that do not receive government funding for R&D. This is because of the differing timelines under IRA for negotiating the prices of biologics and small molecules. Biologics’ timeline is 11 years after FDA approval, while small molecule drugs are eligible after 7 years. Therefore, Medicare negotiations will begin four years earlier for a small molecule drug that has received approval at the same time as a large molecule biologic drug.

Apart from these adverse effects, such as differential treatment of small molecule drugs compared to biologics under Medicare price negotiation timelines, there are some other negative impacts on the overall US pharma industry, such as diminishing competition among generic drug producers, decreased discovery of new treatments, and new uses of existing drugs.

IRA to affect the revenues of top pharma companies surely but variably

There are differing viewpoints regarding the impact of IRA on pharmaceutical companies’ revenue. One group of experts suggests that Medicare prescription drug negotiations under the IRA will depend on the expiration of the drug’s patent. Other experts expressed their opinion that irrespective of when a drug loses exclusivity, a significant threat to drug revenues comes from the competition entering the market and not from lower negotiated drug prices.

The first group of experts states that lower negotiated prices in 2026 are expected to have a lower impact on medicines projected to witness revenue loss owing to patent expiry around the same time. One such example of a drug losing its exclusivity in the USA in 2025 is Stelara by Janssen Biotech approved for treating psoriasis.

In contrast, pharma companies producing medicines that are expected to witness competition from their generic counterparts after 2026 are projected to lose revenue owing to lower negotiated prices even before the drugs lose exclusivity. However, some companies’ revenue will be affected more than others.

Medicare price negotiations to hit revenues of some drugmakers drastically

The pharma industry’s revenue is expected to decrease by 2% due to the new measures brought about by the IRA, as per a 2022 report by Morningstar, a US financial services firm. Among the companies that will be highly affected are Novo Nordisk, Gilead, Bristol Myers Squibb, AbbVie, and AstraZeneca. In contrast, others, such as Pfizer, Merck, Roche, and Novartis, will not be as much impacted by Medicare price negotiations.

Some 15% of global branded drug sales come from Medicare in the USA, as per Morningstar estimates. Therefore, the impact of the IRA on pharmaceutical companies depends on their reliance on Medicare sales, price adjustments, high-cost specialized drugs, and extended patent protection.

Medicare prescription drug negotiations are projected to impact pharma companies the most among all IRA measures, although this impact might not be uniform across the players. On the other hand, Medicare negotiations are projected to save the government approximately US$100 billion through 2031. The pharma companies facing the highest revenue losses include Novo Nordisk, Gilead, and AstraZeneca.

When the Medicare price negotiation measures start to roll out in 2026, two drugs of Novo Nordisk, namely, Ozempic and Rybelsus, that are approved to treat type 2 diabetes, are expected to witness an 8% decline in their projected revenue through 2031, as per Morningstar. Gilead’s Biktarvy, which treats HIV-1 infections, is expected to be subject to price negotiation in 2027 and thereby face a projected revenue loss of 7% through 2031. On similar lines, Calquence (to treat mantle cell lymphoma) and Tagrisso (to treat non-small cell lung cancer) drugs of AstraZeneca are expected to lose 6% revenues through 2031 owing to Medicare price negotiations.

In contrast, considering the existing portfolios, Pfizer, Merck, Bristol Myers, and BioMarin are expected to witness no revenue loss due to Medicare negotiations.

Medicare inflation caps to impact major pharma companies negatively

Another important IRA measure is Medicare inflation caps. This measure involves drug producers paying penalties for increasing drug prices beyond the inflation rate. It is expected to result in US$62 billion in government savings through 2031.

Around March 2023, the US federal government, along with the Centers for Medicare & Medicaid Services (CMS), released a list of 27 drugs whose prices were increased by their manufacturers at a higher rate than the inflation rate. This list included AbbVie’s Humira (to treat Crohn’s Disease) and Astellas Pharma’s and Seagen’s Padcev (to treat urothelial cancer). Gilead Sciences, Johnson & Johnson, and Pfizer are among other impacted companies by Medicare inflation caps. Pfizer had the most drugs on the list, with a total of five.

Bristol Myers Squibb is one of the pharma companies that is expected to be highly impacted by Medicare inflation caps. The company’s drugs, such as Eliquis (to treat or prevent blood clots), Opdivo (to treat melanoma), Orencia (to treat rheumatoid arthritis), and Yervoy (to treat various cancer types) are among the medicines that are expected to face revenue loss owing to inflation caps. Other drugs on the list include Novo Nordisk’s drugs such as Novolog and Levemir (both for type 1 diabetes) and Victoza (for type 2 diabetes), Johnson & Johnson’s drugs such as Imbruvica (to treat certain cancers) and Xarelto (to treat or prevent blood clots), along with Novartis’s Sandostatin (for severe diarrhea and flushing related to metastatic carcinoid tumors).

In contrast, Merck is not expected to face any revenue loss due to inflation caps, while GSK, Regeneron, Roche, and Sanofi are projected to witness minimal revenue loss as these companies have not raised the prices of their drugs beyond the inflation rate.

IRA to potentially reduce competition from generics

According to the IRA, following the price negotiations of some of the branded drugs, manufacturers of the generic versions of such drugs will have less scope to charge a reduced price for those drugs. This would disincentivize the generic drug producers to manufacture generic versions of the already low-priced branded drugs.

EOS Perspective

The IRA represents a substantial change in the US legislation that strives to make healthcare more affordable to Americans through increased access to more reasonably priced prescription medicines.

However, IRA can be expected to affect small-molecule drugmakers more negatively than biologics. Moreover, some pharmaceutical companies are projected to feel the pinch more than others in terms of revenue losses.

Companies such as Merck, Bristol Myers Squibb, and the pharmaceutical association PhRMA have filed lawsuits against some provisions of the IRA, stating that they are unconstitutional. Bristol Myers Squibb and J&J are planning to appeal after the US court dismissed the IRA lawsuits. These pharmaceutical companies are trying to find ways to circumvent the negative impact of the legislation.

IRA is also expected to negatively impact R&D and medical innovation. This is evident from the fact that biopharma companies have reduced their R&D efforts in the neuroscience space, especially since a lot of development work in this space involves small-molecule drugs. Moreover, as IRA exempts only one orphan drug from price negotiation, investments in R&D for orphan drugs are likely to get deprioritized. Many pharmaceutical companies are reconsidering their R&D planning and investment strategies to counter the effect of IRA.

IRA is clearly not a win-win strategy for all stakeholders. Pharmaceutical companies are mostly at the losing end, while patients could be winners. Considering all the positives and negatives of IRA, only time will tell the actual impact of the legislation on the overall pharmaceutical industry.

The Rise and Fall of Cue Health Market Lessons and Implications by EOS Intelligence
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The Rise and Fall of Cue Health: Market Lessons and Implications

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Cue Health, the portable COVID-19 test maker, reached its zenith during the pandemic’s peak, securing investments and contracts from both government and private sectors. The company was lauded for its user-friendly, rapid-response COVID-testing kits. At its peak, Cue Health’s products were seen as game-changers, with the potential to revamp the healthcare sector by providing accurate at-home diagnostic results within minutes. However, sales of these testing kits plummeted before Cue Health could diversify and establish other revenue streams, leading to a series of layoffs and, ultimately, the shutdown of its operations.

As the public focus shifted away from the pandemic, so did the demand for testing. For Cue Health, the COVID-19 test was essentially their sole product, and this decline in demand marked the onset of turbulent times.

In the past few years, Cue Health struggled to maintain its market position and technological edge, focusing on restructuring and streamlining its operations. The company engaged in talks with potential investors and stakeholders, which did not materialize. It also implemented several cost-cutting measures to remain afloat amid financial turbulence, but these were insufficient to counter the broader economic challenges that Cue Health faced. Its share prices declined steadily, and several rounds of layoffs followed.

The final blow came when the FDA issued a warning letter and a safety alert on May 10, 2024, asking users and healthcare providers to discard Cue Health’s product. The FDA discovered unauthorized changes made to Cue Health’s COVID-19 testing kits. This ultimately led to Cue Health’s winding down operations and filing for bankruptcy in May 2024 after laying off all its employees.

Cue Health’s business failures: A look at three critical oversights

Absence of recurring revenue streams: The company’s COVID-19 testing device was a one-time purchase, and it did not need any consumables or refills. This prevented the development of a recurring revenue model, such as subscription-based services or ongoing product sales, which is essential for financial stability and sustained revenue stream. Dependence on the one-time test kit sales implied that once its demand subsided, there was no consistent income to support operations.

Top-heavy business model: Cue Health employed many individuals in leadership positions, a common mistake that start-ups tend to make. This resulted in high salary costs, even amidst financial turbulence, eventually leading to several layoffs.

Moreover, the company struggled with financial management and strategic planning. Efforts to engage with investors and stakeholders did not yield results, further compounding the company’s financial crisis.

Narrow focus: Cue Health’s business model heavily depended on a single product, the COVID-19 testing kit, which nearly constituted its complete product portfolio. This singular focus left the company vulnerable to the declining demand for COVID-19 testing kits, and it was not able to pivot quickly to diversify product offerings. Moreover, the company was also unprepared for post-pandemic market realities, which led to its decline.

Cue Health’s wind down: Repercussions for diagnostics sector and investors

Regulatory and compliance implications: Cue Health’s regulatory challenges highlight the critical need for compliance and transparency in product modifications. Consequently, other companies in the diagnostics and medical devices sector may now encounter heightened regulatory scrutiny by the FDA. To stay afloat and avoid similar pitfalls, these companies must invest more in compliance, ensuring all products meet regulatory and quality standards. This could result in better overall product quality and safety across the industry, although at a higher cost to the device makers.

Industry lesson: Cue Health’s trajectory – from swift growth to sudden downfall – serves as a case study for industry players to understand the risks associated with over-reliance on a single product and the importance of portfolio diversification. Companies operating in the diagnostics sector should leverage the company’s experience to reevaluate business strategies and enhance risk management practices.

Investor sentiment: Cue Health’s downfall, despite the substantial funding and a successful IPO, could lead to more cautious investor behavior and diminished confidence in healthcare start-ups, particularly those with a singular product focus. For future investments, investors may demand more scrutiny and rigorous due diligence. Consequently, companies may be pressured to build diversified product portfolios and more sustainable business models to mitigate risks associated with market fluctuations and regulatory challenges.

EOS Perspective

Cue Health’s shutdown highlights the volatility and unpredictability of the MedTech sector, underlining the importance of regulatory compliance, portfolio diversification, and market adaptability. While innovation and growth are imperative for staying competitive in the diagnostics sector, striking a balance with robust financial planning and risk management practices is equally important.

For other diagnostics companies, Cue Health’s downfall serves as a cautionary tale, emphasizing the importance of building sustainable business models that can withstand market fluctuations and external pressure. For investors and stakeholders, it accentuates the requirement of stringent due diligence and risk assessment for high-stakes investments in emerging health technologies.

Despite Cue Health’s closure, its journey is important. The company leaves behind a legacy of innovations, diagnostic tools, and resourceful healthcare delivery models. Other diagnostics companies can build on Cue Health’s technological foundation, learning from its experiences to navigate the complex healthcare technology landscape.

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence
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An Era of Innovation: Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm

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Since the approval of the first drug, interferon beta 1b (IFNβ-1b), in 1993, the treatment landscape of multiple sclerosis (MS) has significantly changed. Currently, there exist more than 20 disease-modifying therapies (DMTs) to treat MS, encompassing orals, injectables, and infusions. These drugs, however, can cause adverse side effects such as toxicity, pregnancy-related complications, and gastrointestinal symptoms, among others. Moreover, about 5-10% of the patient population still develops disability. Despite the wide range of therapeutic options available, patients experience relapses and worsening disease symptoms, which significantly reduce their quality of life.

The ongoing challenges have driven pharmaceutical companies to develop and launch drugs that offer greater efficacy and safety, enhancing patients’ health outcomes in the longer term. In particular, significant efforts are geared towards treating the progressive forms of MS, such as Primary Progressive MS (PPMS) and Secondary Progressive MS (SPMS), for which therapies are currently limited.

Several emerging therapies are in various stages of development, targeting distinct mechanisms of the underlying disease etiology. Among all the emerging therapeutic approaches, Bruton Tyrosine Kinase Inhibitors (BTKIs) emerge as the most promising, currently in later stages of clinical trials, poised for approval. The potential advantage of BTKI agents is that they can treat both relapsing and progressive forms of MS.

Remyelination is another equally promising therapeutic approach, as it has the potential to promote myelination, restore axonal and neuronal health, and prevent disability; however, extensive clinical trials are essential to develop these drugs and fully integrate them into clinical practice.

On the other hand, monoclonal antibodies (mAbs) are becoming the most common therapeutic option due to their higher selectivity for B-cells (a type of immune cell), a fact that plays a crucial role in MS disease pathogenesis. The higher selectivity of mAbs allows to efficiently target these cells and reduce inflammation.

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence

An Era of Innovation Novel Drugs Redefining Multiple Sclerosis Treatment Paradigm by EOS Intelligence

Pharma companies place high hopes on BTKI

Following the success of B-cell depleting therapies in treating MS, there has been a notable surge in interest in utilizing a novel class of medications called BTKI. BTK is an enzyme crucial for the functioning of B-lymphocytes, which elucidates the autoimmune response in MS patients. Unlike B-cell depleting therapies, which directly reduce the number of B-cells, BTKIs alter B-cell function, preventing relapse or slowing disease progression in MS patients.

These BTKIs can be taken orally, offering a convenient and easy way of administration. Another potential advantage is that BTKIs can cross the complex blood-brain barrier, which other MS drugs fail to do. Due to this potent efficacy, researchers believe that BTK inhibition can even act as a cure for MS.

Over the past few years, top pharma companies such as Roche, Sanofi, InnoCare, and Novartis have betted big on BTKI to treat MS patients. There are currently four BTKI agents that are being investigated for MS treatment – Sanofi’s Tolebrutinib, Roche’s Fenebrutinib, Novartis’ Remibrutinib, and InnoCare’s Orelabrutinib. Among these, Sanofi is ahead in the race, looking to submit its BTKI drug Tolebrutinib to treat Relapsing-Remitting Multiple Sclerosis (RRMS) for FDA approval in 2024. The company is also currently evaluating Tolebrutinib in a phase 3 trial for treating PPMS, which is expected to be completed in August 2024. If successful, Sanofi would become the first pharmaceutical company to offer BTKIs for both RRMS and PPMS. At present, Roche’s Ocrevus (Ocrelizumab) is the only DMT approved for treating PPMS. Sanofi’s approval of BTKIs would set the stage for direct competition between Roche and Sanofi in the treatment of PPMS. However, Roche’s Ocrevus patent expires in 2029, hence the company remains focused on its BTKI drug Fenebrutinib.

Similar to Sanofi, Roche is testing Fenebrutinib for treating both RRMS and PPMS patients. Roche is slated to complete its phase 3 studies investigating the drug to treat RRMS in November 2025 and PPMS in December 2026.

Novartis and InnoCare are slightly trailing in the competition. Novartis is currently evaluating its BTKI drug, Remibrutinib, in phase 3 clinical trials to treat people with RRMS, expected to be completed in 2029. On the other hand, InnoCare is currently evaluating Orelabrutinib in phase 2 trials for RRMS treatment. Both Remibrutinib and Orelabrutinib cannot be used to treat PPMS, which is a major limitation.

The development of BTKI fosters hope for the next era of MS treatment, as the therapy treats both relapsing and progressive MS. However, the safety and efficacy of each drug still needs to be understood.

Results from BTKI clinical trials indicate that these drugs differ in the strength of BTKI inhibition, BTK enzyme binding mechanism, and central nervous system (CNS) penetration. For instance, Sanofi’s Tolebrutinib showed greater CNS penetrance than the other BTKI agents, making the drug a potential candidate for treating PPMS. On the other hand, Roche’s Fenebrutinib is the only reversible BTK inhibitor that does not cause drug resistance, thus offering a better and safer treatment compared to the rest of the BTKI agents.

It is too early to predict the timeline and extent to which these drugs will be incorporated into the MS treatment paradigm. Until then, pharmaceutical companies in this space will persist in vying to accelerate the launch of their therapies in the fiercely competitive MS market.

Therapies targeting remyelination nearing clinical trials

In MS, myelin, a fatty tissue that surrounds the nerve cells, gets damaged, impairing the nerve’s ability to send electrical signals. At present, no therapies can promote myelin repair in MS patients. The current treatments focus primarily on reducing immune system activity and stopping immune cells from entering the CNS to reduce relapse rates and improve symptoms. The emergence of remyelination therapies holds extensive promise by protecting and restoring neuronal function, and preventing clinical disability in MS patients.

Remyelination works by either removing myelin debris or by creating a type of cells called oligodendrocytes to repair and replace the damaged myelin sheaths.

Over the last few years, pharmaceutical companies have shown heightened interest in evaluating and developing drugs that could promote remyelination. Some of these drugs are in later stages of development, nearing clinical trials.

For instance, in March 2024, Convelo Therapeutics, a US-based biotechnology company, announced that its two oral therapies showed promising evidence in myelin repair in animal models. Similarly, in the same month, the FDA granted a breakthrough device designation to a neurostimulator, for treating RRMS. The device is developed by SetPoint Medical, a US-based healthcare company, to slow myelin damage in RRMS patients. Both these companies have been working to begin clinical trials soon to test their remyelinating agents.

Numerous other companies across the world are also conducting extensive research on remyelination therapies for MS. Additionally, studies are underway to explore the potential of existing drugs, such as Metformin, Ibudilast, and Clemastine, among others, in promoting myelin repair. Encouraging results from preclinical trials and ongoing research studies foster growing optimism that this approach will become viable in treating MS patients in the future.

However, work on remyelination to treat MS patients has just begun, and there is still a long way to go. Defining the optimal clinical criteria for evaluating myelin repair appears largely undefined. There is also an urgent need to develop tools to measure the remyelination achieved and assess the drug’s effectiveness. That said, recent discoveries shedding light on remyelination processes and the functions of oligodendrocyte cells inspire hope that these issues will be effectively addressed in the coming years. Companies are also developing advanced imaging techniques to quantify myelination.

Overall, remyelination emerges as the sole therapy focused on repairing the neuro damage and improving the neurodegenerative conditions in MS patients, which is not currently fulfilled by existing treatments. This underscores remyelination as an inevitable treatment approach for both RRMS and PPMS.

Monoclonal antibodies continually transforming the MS treatment landscape

In recent years, mAbs have emerged as the indispensable treatment option for managing the relapsing forms of MS. These therapeutic agents offer high efficacy in managing symptoms while providing additional advantages such as ease of dosing and lower side effects compared to traditional therapies.

Given the promising potential of this therapeutic approach, pharma companies strive to introduce novel mAbs targeting different cells, molecular pathways, or molecules. Interestingly, new mAbs are also being developed to help repair the damage or disability that has already occurred. Thus, mAbs aim not only to alleviate symptoms but also repair the damage caused by MS, potentially reversing disability – a critical unmet need in the MS treatment landscape.

Among all the mAbs approved, antibodies that target the CD20 molecule (a protein found on the surface of B-cells) have gained significant interest lately. In recent years, the FDA has approved various therapies targeting anti-CD20 molecule. Currently, anti-CD20 mAbs such as Ocrelizumab, Natalizumab, Ofatumumab, Ublituximab, and Rituximab are used for the treatment of MS. Ocrelizumab, developed by Roche, stands out as the only mAb approved for treating both RRMS and PPMS. Ublituximab, developed by TG Therapeutics, is the latest addition to this group, approved by the FDA in 2022.

The mAb market is highly competitive. Hence, companies have been increasingly seeking to differentiate their products based on parameters such as efficacy, safety, and dosing convenience to capture larger market shares. For instance, Novartis considers the ease of administration to be the primary differentiating factor to help drive its mAb sales. The company launched Ofatumumab in 2020, the only mAb that can be administered via injection for treating RRMS. Similarly, Roche is developing Ocrevus subcutaneous injection version similar to the IV infusion. Phase 3 trials are currently underway to evaluate the drug to treat both RRMS and PPMS.

Companies have also been looking to differentiate their drugs in terms of safety. The common side effect of MS therapies is lymphopenia, i.e., lymphocyte depletion, which can pose risks, such as increased vulnerability to infections. To address this, Sanofi is developing a CD40-based mAb named Frexalimab to treat RRMS and SPMS. CD40L is a protein that activates the innate and adaptive immune systems in humans. Sanofi’s phase 2 trials investigating Frexalimab rapidly reduced the disease activity up to 89% without depleting the lymphocytes, thus offering a safer treatment option. Sanofi already has a strong MS pipeline with its BTK drug, Tolebrutinib, to be approved in 2024. Frexalimab, once approved, is expected to further boost the company’s market share.

While mAbs are promising, factors such as high prices hinder their market penetration. Consequently, companies have been looking to develop biosimilar compounds for mAbs, aiming to lower drug prices while simultaneously maintaining and expanding their market share. For instance, in August 2023, the FDA approved Tyruko, a monoclonal antibody that is a biosimilar version of Biogen’s Natalizumab, for treating RRMS. Overall, an increased interest in R&D, coupled with the number of clinical trials underway indicate that mAbs will remain a favored approach in MS treatment for the foreseeable future.

EOS Perspective

The MS treatment market is expected to witness significant growth, reaching a value of US$39 billion by 2032. The increasing prevalence of MS and the demand for highly effective therapies are driving pharma companies to investigate and develop novel drugs. Extensive R&D efforts and the high unmet needs for treating PPMS and SPMS are the other key factors fueling market growth. In addition, governments worldwide are actively supporting drug research with substantial funding.

To gain higher market shares in the competitive MS market, pharma companies are fiercely focusing on innovation and differentiation. They are conducting extensive clinical trials to demonstrate their drugs’ efficacy and superiority. Additionally, these companies are striving to innovate in other aspects, such as drug safety, tolerability, ease of dosing, and convenient routes of administration.

The primary challenge slowing market growth is the high cost of drugs. MS drugs are very expensive, with prices consistently rising each year. According to a 2019 survey published by the National Multiple Sclerosis Society, 40% of respondents terminated their treatment due to the high costs of DMTs. Hence, companies must navigate reimbursement processes and negotiate drug prices with payers to ensure broad patient access and increased market penetration.

Other challenges inhibiting the market growth include patent expiration and the complex nature of MS. Patent expiration allows low-priced generics to enter the market, negatively impacting drug sales. Additionally, the disease’s high heterogeneity limits companies’ ability to develop therapies for the long term.

However, despite these challenges, the MS treatment market looks promising and is continually evolving. In recent years, the treatment landscape has shifted towards introducing highly efficient and safer therapies earlier in the disease course to prevent complications in the longer term. Consequently, companies demonstrating higher drug efficacy are expected to gain a significant foothold in the market. In addition, substantial opportunities exist for companies that address neuroprotection, as the majority of the existing treatments primarily target the inflammatory part of the disease.

The Promise of Comprehensive Genomic Profiling in the USA by EOS Intelligence
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The Promise of Comprehensive Genomic Profiling in the USA

Comprehensive Genomic Profiling (CGP) is a diagnostic tool that sequences a patient’s tumor DNA to identify genetic mutations that drive cancer growth. Insurance coverage for CGP varies widely depending on the type of cancer, the patient’s stage of disease, and the specific test being used.  Despite CGP’s tremendous potential to transform cancer care and diagnosis, its implementation is hindered by inconsistent insurance coverage policies.

Comprehensive genomic profiling is a cutting-edge technology that is revolutionizing cancer diagnosis and treatment. Unlike standard gene testing, which looks at a small number of genes, CGP analyzes thousands of genes across the entire genome. This provides a much more comprehensive picture of genetic mutations that may be driving a patient’s cancer, thereby leading to more personalized and effective treatment options. Despite the benefits of CGP, access to this technology remains limited due to a variety of factors, which include high costs, limited insurance coverage, and regulatory hurdles.

One of the biggest challenges for CGP has been payer acceptability. Payers tend to be cautious about covering CGP because it is a relatively new technology, and there is still some debate about its clinical value and cost-effectiveness.

Private payers in the USA are more likely to cover CGP for patients with rare or complex cancers or for patients who have failed standard therapies, such as chemotherapy or radiation therapy.

In contrast, public payers, such as Medicare, may have more restrictive criteria for coverage and only cover CGP for certain types of cancer or for patients who meet specific clinical criteria. These criteria could include a requirement that CGP tests be performed in Medicare-accredited labs. Other major public payers in the USA, such as Medicaid and Veterans Affairs (VA) health plans, also cover CGP, but each payer has different criteria for coverage. Generally, they require that the test is ordered by a physician and is deemed medically necessary for the patient’s treatment plan.

The lack of coverage makes it financially inaccessible for many patients, which limits the ability of healthcare providers to consistently offer CGP testing. This presents a significant obstacle to the widespread adoption of this promising diagnostic tool. Some payers are hesitant to reimburse CGP due to concerns about the cost-effectiveness of the test and the lack of long-term data on clinical outcomes. However, major public and private payers such as Medicare, UnitedHealth (UHC), Aetna, and Cigna, among others, have included CGP tests in their health policies in recent years, nonetheless, the coverage remains uneven.

Cost and regulatory hurdles are stifling the growth of CGP

Payers have historically covered traditional testing, such as immunohistochemistry (IHC), fluorescent in situ hybridization (FISH), and single gene tests, but have been hesitant to provide coverage for CGP. This is mainly because these tests have been around for longer than CGP, so payers are more familiar with them and are more comfortable covering them.

Another reason is that CGP is more expensive than traditional tests. While the exact cost varies depending on the specific test and lab performing it, the cost of CGP tests can range from a few hundred dollars to several thousand dollars, while traditional tests are typically in the range of a few hundred dollars. This is due to the fact that CGP tests are more complex as they analyze a large number of genes, whereas traditional tests focus on analyzing one specific gene at a time, making them less expensive.

According to a study published in 2021 by the Journal of Clinical Oncology, CGP could improve overall survival by about 6% (0.06 years, a relatively small but meaningful amount of time for cancer patients and their families) for US$9,000 per patient, compared with traditional testing strategies. On the other hand, as per a 2022 article by the American Journal of Managed Care, although the cost of CGP tests is high, these tests can help identify the most effective treatment options for each patient, which can lead to better outcomes and fewer unnecessary treatments, which in turn can lower overall healthcare costs.

Read our related Perspective:
 Commentary: Genetic Testing Fraud – The Next Big Concern for the US Healthcare?

 

To further educate the industry about the benefits associated with CGP, Illumina, a California-based biotechnology company, established Access to Comprehensive Genomic Profiling (ACGP) in 2020, which is an alliance of seven members, including leading molecular diagnostics companies, pharmaceutical manufacturers, and laboratories. ACGP aims to educate about CGP for advanced cancer patients by engaging directly with the US payers.

Additionally, a few strategies are being adopted by the healthcare industry, such as bundling CGP tests with other diagnostic tests to reduce the overall cost per test. This way, instead of running a CGP test and a separate test for a specific genetic mutation, both tests could be combined into one-panel tests. This could reduce the overall cost per test by eliminating the need to run two separate tests, as well as reducing the need for multiple lab visits and samples. However, it’s important to note that the savings may vary depending on the specific tests and the laboratory.

The ambiguity surrounding reimbursement for CGP tests among the insurers also stems from the FDA’s ongoing debate over proper classification and regulatory framework for these tests. While the FDA recognizes the potential benefits of CGP, concerns linger about its quality, accuracy, and cost-effectiveness. To address these concerns, the FDA has been working with stakeholders to establish reimbursement policies that make CGP tests accessible to patients. These stakeholders range from academic institutions (such as Mayo Clinic and Memorial Sloan Kettering) to health insurance companies (such as UnitedHealthcare and Aetna) to CGP test developers (such as Guardant Health and Foundation Medicine).

Payers’ coverage for CGP is expanding but is highly uneven

Payers, such as Aetna and Cigna, have included CGP tests in their health plans but do not cover all types of cancers. While an increasing number of payers is expanding coverage for CGP, there is a lot of variation in terms of what is covered and for which types or stages of cancer.

For instance, Aetna announced in 2020 that it would cover CGP testing for certain types of breast and colorectal cancer. However, the coverage for each type of cancer gene mutation is different.

While Aetna’s policies for CGP coverage are very nuanced, Cigna’s are complicated. Cigna‘s coverage varies depending on the type of CGP test being ordered, whether the test is considered medically necessary for the patient’s condition, and the patient’s location. Sometimes, the patient needs to meet certain criteria to be eligible for coverage (e.g., only the advanced stage of cancer is considered under coverage).

Similarly, UHC, one of the leading private health plan providers in the USA, also limited its CGP coverage to patients with advanced cancers, such as lung, breast, or colorectal cancer. However, in early 2023, UHC issued a new policy expanding coverage for CGP tests from Foundation Medicine and Guardant Health. The new policy covers CGP tests for a wider range of cancers, including early-stage cancers and other types of tumors. The goal of this policy change is to increase access to CGP testing and to help catch cancer earlier when it is more treatable.

Aetna and Cigna are not far behind in expanding their coverage for CGP tests. In 2023, both companies included additional benefits for members receiving CGP testing, such as on-site care in some facilities and counseling services.

There’s an increasing recognition that CGP can help identify patients who may benefit from targeted therapies. Overall, payers are becoming more open to covering CGP, but there is still variability in their policies and coverage levels.

EOS Perspective

The adoption of CGP is creating a ripple effect throughout the healthcare industry. Payers are increasingly recognizing the value of CGP tests and expanding their coverage. By providing broader coverage for CGP tests, payers can position themselves as offering more cutting-edge care options. This can give them a competitive edge over other insurers who may not provide coverage for these tests. In addition, by broadening the coverage of tests for early-stage cancer, payers can help to identify and treat cancers earlier, which can lead to better outcomes for patients and potentially lower costs in the long run.

Further, the growing adoption of CGP has an impact on healthcare industry stakeholders beyond payers. It is likely to fuel a shift towards precision medicine, where treatments are tailored to the individual patient based on genetic information.

Diagnostic companies are likely to invest in CGP technology to stay competitive and offer more comprehensive tests. For healthcare providers, offering CGP tests allows them to differentiate themselves, improve patient outcomes, and attract more patients. However, it can also add complexity to the treatment process and increase costs if not managed correctly (e.g., wrong interpretation of genetic information due to the large amount of data for individual patients).

For test kit producers and labs, CGP is creating new opportunities for growth and market share but also increased competition and pressure to lower costs and improve accuracy.

Overall, while still not fully embraced by the industry, CGP is shaking up the healthcare landscape, creating both great opportunities and new challenges for all stakeholders.

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie

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For many years, bariatric surgery has been the go-to option for people struggling with obesity and obesity-induced conditions. However, for the last couple of years, another easier option has become available in the form of GLP-1-based weight loss drugs. This class of medicine mimics a hormone that helps reduce food intake and control appetite. These drugs have revolutionized the weight loss market, which was previously dominated by gimmicky and fad-based OTC solutions. Due to GLP-1’s proven effectiveness, there is soaring demand for these drugs, outstripping its current supply capacity. While only two players operate in this market, several leading drugmakers have been racing to develop their own version of the drug. Moreover, with additional proven merits of the drug beyond just weight loss, it has become more appealing for pharma players to invest in.

GLP-1 anti-obesity drugs make big waves in the pharmaceutical sector

Over the past few years, anti-obesity drugs have received immense attention from healthcare professionals, pharmaceutical companies, and the general public. A new class of medication that stands out is glucagon-like peptide-1 (GLP-1) agonists, traditionally used for treating Type 2 diabetes. But along with managing diabetes, these drugs also suppress appetite and lower calorie intake by mimicking the GLP-1 hormone (a gastrointestinal hormone), which causes the patient to feel fuller longer and thereby prevents overconsumption. Regular intake of such drugs is deemed to result in a weight loss of about 15-25% of body weight in obese people.

GLP-1 agonists received FDA approval as anti-obesity drugs in 2021. Given their promising results, the demand for these drugs has increased immensely. However, despite the patient’s high out-of-pocket price of US$1,000 plus, there are severe shortages in the market.

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence

Anti-Obesity Drugs – Pharma Companies Race to Grab a Bite of the Pie by EOS Intelligence

Only two players operate in this highly-coveted market

The GLP-1-based medication is now marketed in two categories – one for managing diabetes and blood sugar levels and the other as a weight loss drug. The GLP-1-based weight loss drug market is highly consolidated, as only two players operate in this space. These are Denmark-based Novo Nordisk and US-based Eli Lilly.

Novo Nordisk, the market leader, received FDA approval for its weight loss injectable, Wegovy, in June 2021. This drug uses the same active ingredient as Novo Nordisk’s diabetes drugs, Ozempic and Rybelsus (oral); however, it has a different dosage and can also be used for weight loss in patients who do not have diabetes. That being said, Ozempic has also been used off-label for weight loss.

On the other hand, Eli Lilly’s injectable drug for weight loss, Zepbound, received FDA approval in November 2023. Eli Lilly’s glucose-dependent insulinotropic polypeptide – GIP/GLP-1 injectable drug for diabetes, Mounjaro, has the same composition and dosage as Zepbound and is often prescribed off-label for weight loss as well.

While Novo Nordisk’s drugs, which use semaglutide as an active ingredient, result in weight loss of about 13 to 22 lbs, the drugs by Eli Lilly have tirzepatide as an active ingredient. They are stated to result in a weight loss ranging between 15 and 28 lbs.

From a price-point perspective, Wegovy has an out-of-pocket cost of US$1,349 per month, compared to Zepbound, which has an out-of-pocket cost of US$1,060 per month. Thus, while Novo Nordisk’s Wegovy has the first-mover advantage, Eli Lilly’s Zepbound is considered more effective and better priced.

Currently, both weight loss drugs by Novo Nordisk and Eli Lilly come in the form of injectables. However, both companies are developing oral versions of the drug as they are easier to administer and more convenient to prescribe. They may also help ease supply constraints currently impacting the injectables. In June 2023, Novo Nordisk conducted Phase 3 trials for its once-daily oral Wegovy drug, according to which the drug helped obese adults lose about 15% of their body weight. Similarly, in June 2023, Eli Lilly conducted Phase 2 trials for its oral GLP-1 receptor for weight loss. The drug helped obese adults lose up to 14.7% of their body weight. Both companies are optimistic about the outcomes of their trials; however, the expected launch timelines for these drugs have yet to be determined.

Leading drugmakers race to compete in the growing anti-obesity drug market

Currently, Novo Nordisk and Eli Lilly are the only two players operating in this market. However, several other leading pharmaceutical players have joined the race and are working towards developing their own version of the drug, either through in-house R&D or through strategic acquisitions.

Moreover, they are targeting their research towards developing and marketing a new generation of GLP-1-based medications that are administered orally, are longer lasting, and have additional health benefits and limited side effects.

In February 2024, US-based biopharmaceutical company Amgen successfully completed a Phase 1 clinical trial for its GLP-1 agonist drug, MariTide. As per the trials, the drug produced a 14.5% weight loss in patients administered the highest dose. Moreover, the company claims that the trial indicates that patients may need to take less frequent doses of MariTide (compared with current competition), and the weight loss achieved stays significantly longer. The company has begun its Phase 2 trial, with results expected by late 2024.

In December 2023, Swiss-pharmaceutical giant Roche acquired US-based Carmot for US$3.1 billion (US$2.7 billion upfront cash and US$400 million on certain milestones). This acquisition has helped put Roche on the map for obesity drug development. Carmot has two GLP-1 agonist molecules for weight loss, which are currently being tested in the mid to advanced stages of clinical trials. The first drug, CT-388, is a once-weekly injectable and has completed Phase 1 clinical trial, while the other drug, CT-996, is an oral drug currently undergoing Phase 1 trials.

In November 2023, UK drugmaker AstraZeneca entered into an agreement with Shanghai-based Eccogene, wherein the former licensed an oral once-daily GLP-1 receptor agonist called ECC5004 for the treatment of obesity, Type 2 diabetes, and other cardiometabolic conditions. For this, AstraZeneca agreed to pay Eccogene an upfront fee of US$185 million for the drug and a further payment of US$1.83 billion in future clinical, regulatory, and commercial milestones and tiered royalties. The drug is currently in Phase 1 development, and the company hopes to enter Phase 2 of clinical studies by the end of 2024. In the past, AstraZeneca stopped the development of two GLP-1 agonist drugs that were being developed in-house. The development of an injectable called Cotadutide was halted in April 2023, and an oral drug called AZD0186 was halted in June 2023 after their respective Phase 2b and Phase 1 clinical trials did not yield the desired results.

Pfizer, one of the most active companies in this regard, has faced multiple failures in their endeavor to develop a competitive obesity drug. In 2020, it started a clinical trial for its GLP-1 agonist weight loss drug, Lotiglipron. However, in June 2023, the company stopped developing the drug after its Phase 1 and Phase 2 drug interaction studies indicated a rise in liver enzymes in patients who took the drug once a day. In 2021, the company simultaneously began working on another GLP-1 receptor agonist, Danuglipron, which was to be taken twice daily. While the Phase 2a trial for the drug in June 2023 showed promise, the company halted the development of the drug post its Phase 2b trial in December 2023. The drug was scrapped as, despite significant weight loss, the trial patients experienced high rates of common gastrointestinal and mechanism-based adverse side effects. The company is now conducting a pharmacokinetic study with a once-daily version of the Danuglipron drug that will provide guidance on future development plans.

Pfizer’s failure with these two drugs demonstrates the struggle the leading pharma companies face to develop a safe, effective, and tolerable GLP-1 agonist for weight loss.

GLP-1 agonist drugs have benefits beyond diabetes and weight loss

Despite multiple setbacks, leading pharma companies are investing heavily in this space, as they understand the potential of these drugs. While currently, GLP-1 agonists are poised as diabetes and weight loss drugs, they have far more benefits. Data from ongoing clinical trials and independent studies suggest that GLP-1 agonists also help improve cardiovascular health and kidney function and help treat addiction and dementia.

In March 2024, Novo Nordisk’s Wegovy received FDA approval for reducing the risk of serious cardiovascular complications in adults with obesity and heart disease. This is based on the results shared from the company’s three-phase trial SELECT, which indicated that Wegovy reduced patients’ risk of major cardiovascular problems by about 20% during the five-year trial period.

Similarly, in 2019, the company started another clinical trial, FLOW, to determine the impact of GLP-1 agonists on kidney function. As per the interim results in October 2023, the trial displayed that Ozempic (Wegovy’s diabetes counterpart) reduced the risk of kidney disease progression and kidney and cardiovascular death in diabetes patients by 24%. Given its success, the company has halted the trial at the interim stage.

An initial study conducted on animals in March 2023 reportedly showed positive results for curbing addictive tendencies, such as drinking and smoking, with Ozempic. Currently, two trials are being undertaken to validate the use of GLP-1 agonists in humans to manage drug and alcohol addiction. Given the testimonies from current users of the drug, it is indicative that the drug has been helping users curb their addictions.

In addition to this, several researchers are also suggesting that GLP-1 could be used in the treatment of dementia and other cognitive disorders. This is based on the claim that GLP-1 agonists reduce the build-up of two proteins, amyloid, and tau, in the brain. These two proteins are known to be responsible for Alzheimer’s disease, which is the most common form of dementia. In February 2022, a new trial at the University of Oxford was initiated to test people with high levels of amyloid and tau and at risk of developing dementia to determine if the use of GLP-1 agonists would result in a reduction in tau accumulation and brain inflammation. The interim results from the study have not yet been disclosed.

High prices and limited coverage pose as speedbumps for obesity drug adoption

While these obesity drugs have exploded in popularity in recent times and are only expected to grow further as their case use increases, they do have certain shortcomings and challenges that are important to address.

These drugs are known to cause several side effects, such as nausea, diarrhea, vomiting, constipation, and ulcers. They can also lead to severe complications, such as pancreatitis, in some extreme cases. While most of the common side effects of the drugs are manageable and justifiable given the risk-benefit ratio, one of the key issues with the drugs is that they need to be taken in perpetuity to keep the weight off. In other words, once a patient stops taking the drugs, the weight comes back. Given that these drugs are priced at more than US$1,000 per month at the moment, taking them constantly becomes a considerable challenge for patients.

Moreover, considered as ‘vanity-use’, these drugs are currently not covered by most medical insurance policies, and thus, patients have to pay for them out-of-pocket. While several employers in the USA are considering including these drugs in their health plans, they are still debating their merit. Employers acknowledge the benefits of these drugs as they help employees who battle with obesity improve their health and, in turn, improve overall performance and employee satisfaction. However, high costs and long-term use act as definite barriers, which make both employers and insurers reluctant to cover these drugs.

Insurers are slowly warming up to the inclusion of GLP-1 drugs in their plans

In March 2024, leading insurance company Cigna stated that it would expand insurance coverage to include weight loss drugs but would limit how much health plans and employers spend on the drug each year. As per Cigna’s benefits management unit, Evernorth Health Services, spending increases for these weight loss and diabetes drugs would be limited to a maximum of 15% annually. The plan offers a financial guarantee and enables employers and health plans to have greater predictability and control over their GLP-1 spending by offering clients (employers) a guarantee that the cost of weight loss and diabetes drugs would not increase by more than 15% annually.

As a part of the effort to limit how much employers spend on GLP-1-based drugs annually, Evernorth has entered into an agreement with Novo Nordisk and Eli Lilly. However, the details of the agreement have not been disclosed.

While this is a good start, the drug would need better coverage by many other insurance players to reach a wider audience.

EOS Perspective

Given that about 12% of the global population and more than 40% of the American population grapple with obesity (as per WHO and 2022 statistics by the National Institute of Diabetes and Digestive and Kidney Diseases, USA, respectively), weight loss drug manufacturers Novo Nordisk and Eli Lilly are sitting on pharma goldmines. The weight loss drugs market, expected to reach US$100 billion by 2030, is poised as one of the most promising sectors for the pharma sector. Thus, it is no surprise that several leading players are investing heavily to join Novo Nordisk and Eli Lilly at the top, either through in-house R&D or through acquisitions.

However, developing these drugs proves to be challenging for drugmakers, as evidenced by the failures of several companies in creating their own versions. We can expect the sector to consolidate further as larger pharma companies look to acquire niche players with their trials being in advanced stages.

Moreover, in a bid to find their footing in this promising sector, pharma players are trying to develop advanced versions of the drug that have benefits beyond just weight loss and offer long-term benefits. This is also because, at the moment, these drugs are not approved by most insurance companies, which makes them extremely expensive for the wider population to afford. This, in turn, is withholding these drugs from becoming mainstream and is thereby preventing them from tapping into their true growth potential. That being said, Wegovy’s recent FDA approval for reducing cardiac complications in people with obesity and heart disease will likely tip the insurers’ coverage scales. Insurance companies are likely to cover the drug in the near future.

Since no other drug in the market offers proven cardiac benefits along with weight loss (including Eli Lilly’s), it is safe to say that Novo Nordisk is way ahead in the race and will dominate the market for the foreseeable future. Thus, to be able to compete in the market, it is not enough for drugmakers to develop obesity drugs offering just weight benefits. They would need to develop drugs that offer higher efficiency or additional therapeutic benefits along with weight loss and price them competitively.

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