NVO - Merck looks to tap into obesity drug market

2024-01-05 04:46:05 ET

Merck ( NYSE: MRK ) is looking to tap into the booming obesity drug market as it seeks new therapies with benefits beyond weight loss.

Speaking at an investor conference hosted by Goldman Sachs, Merck chief executive officer Rob Davis said that the company is looking at a new class of weight loss drugs called glucagon-like peptide 1 (GLP-1) that provide health benefits for diabetes and other disorders alongside weight loss.

The New Jersey-based pharmaceutical company is seeking opportunities through its own drug development as well as deals.

GLP-1 drugs, like Novo Nordisk's ( NVO ) Wegovy and Ozempic and Eli Lilly's ( LLY ) Mounjaro and Zepbound, work by controlling blood sugar levels and triggering a feeling of fullness. Other than weight loss, GLP-1 treatments are also being tested against other conditions such as chronic kidney disease and cardiovascular disease.

Davis believes that GLP-1 therapies offering benefits beyond weight loss will potentially make it easier to get reimbursement for the drugs. He said, "I think everyone recognizes weight management is a hard thing to get reimbursed. But if you can show cardiovascular outcome, if you can show diabetes outcome, which you're starting to see data for, if you can see fatty liver disease benefits...that is an area where we think there's opportunity."

Efinopegdutide, Merck's experimental drug which belongs to the GLP-1 class, is being developed as a treatment for non-alcoholic steatohepatitis and has shown potential in weight loss.

Shares of the drugmaker closed 1.95% high on Thursday, hitting a sixth-day winning streak

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