Eli Lilly first drugmaker to have a GLP-1 weight-loss pill approved in China

Eli Lilly has become the first drugmaker to secure approval in China for a GLP-1 weight-loss pill, granting it a head start over Danish competitor Novo Nordisk. Until now, Chinese authorities had only approved GLP-1 medications in injectable form. The pill, known as Foundayo in the US, will compete against Lilly's own once-weekly GLP-1 obesity injection, as well as similar shots from Novo, Pfizer, and local company Innovent Biologics.

GLP-1 drugs work by mimicking a gut hormone to suppress appetite and control blood sugar in diabetic patients. Lilly's shares rose 1.2% in US premarket trading after the Chinese regulatory announcement, while Novo's Danish shares climbed more than 2%. Lilly aims to launch the drug in China, though specifics on pricing remain undisclosed.

Novo secured approval in August for its oral version of the obesity treatment Wegovy in China, joining a competition that includes experimental GLP-1 weight-loss pills from Chinese pharmaceutical companies like Jiangsu Hengrui Pharmaceuticals and Huadong Medicine. Despite lagging behind Lilly in injectable treatments, Novo is outperforming its US rival in the pill market, commanding over 80% of new prescription volume for pills.

Novo's oral therapy, semaglutide, resulted in approximately a 14% body weight reduction over 64 weeks, while Foundayo led to about an 11% weight loss over 72 weeks in different studies. Novo anticipates its pill will outperform Lilly's in China due to its superior weight loss efficacy. However, the Chinese weight-loss market faces challenges, including the anticipated release of semaglutide copies next year and stringent online sales restrictions.

Despite these hurdles, Novo has managed to maintain its market share and volume against generic competitors. China's National Health Commission predicts that the proportion of overweight or obese individuals in the country could rise to over 65% by 2030, up from roughly 50% in 2020. According to JP Morgan's Yang Huang, annual sales of GLP-1 therapies for weight management in China could reach 30 billion yuan ($4.5 billion) over the next five to seven years, up from the current 3 billion yuan to 4 billion yuan.