The obesity drugs market could be worth over $100 billion annually by the end of the decade according to industry experts as pharmaceutical companies race to find treatments for one of the fastest growing world health problems.

On 23 June, family-owned German company Boehringer Ingelheim said participants in a second phase study of one of its treatments, developed with Danish biotech group Zealand Pharma (ZEAL:CPH), lost an average 19% of their body weight.

Although not directly comparable, it is higher than the weight loss achieved in prior studies of market-leading obesity drug Wegovy where participants lost around 15% of their body weight.

Wegovy is made by Danish diabetes specialist Novo Nordisk (NVI:NYSE). Its success in developing an obesity drug has catapulted its shares 3.6 times higher over the last five years as investors eye the huge market potential.

Eli Lilly’s (ELI:NASDAQ) Mounjaro, which is approved for treating type-two diabetes and awaiting regulatory approval for obesity, induced an average 22.5% body weight loss in clinical trials.

High expectations for the company’s obesity and Alzheimer’s drug portfolio have seen the company become the world’s largest pharmaceutical company by market value at $430 billion.

On 26 June, Pfizer (PFE:NYSE) said it was scrapping its once-a-day obesity candidate on concerns of liver safety, causing the shares to fall over 3%. However, chief executive Albert Bourla said the company will continue developing its twice-daily obesity drug Danuglipron which showed similar weight-loss benefits to Wegovy in mid-stage trial results in May.

Demand for obesity drugs has skyrocketed after celebrities advocated using them as well as off-label diabetes drugs to shed weight. Former prime minister Boris Johnson wrote in The Daily Mail he was taking Wegovy but stopped after suffering adverse side effects.

The World Health Organisation estimates obesity rates have tripled since the mid-1970s and a study from Harvard predicts nearly half of Americans will be obese by the end of the decade.

Boehringer Ingelheim’s experimental drug Survodutide mimics glucagon which speeds up a patient’s metabolic rate, increasing how much energy is burned. A quarter of patients pulled out of the trial after experiencing side effects but the company hopes this can be avoided in later trials if the dose is increased more slowly.

In separate news, Boehringer Ingelheim lost an arbitration case where it was seeking to be indemnified by French pharmaceutical company Sanofi (SAN:EPA) in relation to selling heartburn drug Zantac.

GSK (GSK) invented Zantac and is being pursued by claims the drug causes cancer. It settled a class action lawsuit on 23 June comprising around 3,000 cases to avoid distraction related to protracted litigation on the case, giving the shares a 5% boost on the day.

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