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Key Considerations: Weight Loss Medicines and Suicide Risk for Investors

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New GLP-1 Diabetes and Weight Loss Drugs Under Scrutiny for Potential Suicide Risk


Investors may have been hesitant due to concerns surrounding the potential suicide risk associated with a new class of diabetes and weight loss drugs. The previous medications used to treat overweight and obese patients were plagued with side effects and recalls, making them less desirable. However, the new GLP-1 medications, such as Novo Nordisk's Ozempic, Saxenda, Wegovy, Eli Lilly's Trulicity and Mounjaro, are perceived to be well-tolerated and effective in helping individuals shed pounds. These drugs have gained attention on Wall Street, with analysts estimating that the category could be worth $100 billion.

Review by the European Medicines Agency

The European Medicines Agency (EMA) is currently conducting a review after reports emerged about some patients experiencing suicidal thoughts and self-harm after taking Saxenda and Ozempic. The review has now been expanded to include other GLP-1 receptor agonists, including Lilly's Trulicity. Both Novo Nordisk and Eli Lilly have downplayed the concerns, and the EMA has clarified that the review does not necessarily imply that the medications caused the adverse events. The EMA is expected to make a decision by November.

Cautious Approach by FDA and EMA

Wolfe Research analyst Tim Anderson highlighted that obesity drugs, including GLP-1s, have a centrally acting mechanism, meaning they affect the patient's brain. This suggests a potential risk for neuropsychiatric effects. Additionally, past obesity drugs have been withdrawn due to high rates of psychiatric disorders. However, it is important to note that these were not GLP-1 medications. Anderson believes that the EMA is playing catch-up to the FDA, which has already acknowledged the risk of suicide and depression associated with centrally acting obesity drugs. He also expects that Lilly's tirzepatide (Mounjaro) will carry a similar warning if it is approved for obesity.

Reasons for Optimism

Despite the concerns, Anderson believes that the potential suicide risk is unlikely to be a major concern. He points to the long history and clinical profile of GLP-1 medications, which have been used to treat diabetes since 2005, without significant safety issues. UBS analyst Colin Bristow confirmed that routine monitoring of Mounjaro and Trulicity patients has not identified any safety signals. However, Anderson warns that investors should prepare for more safety concerns as these drugs continue to be closely monitored.

While the potential suicide risk associated with GLP-1 diabetes and weight loss drugs has raised concerns among investors, experts believe that the risk is relatively low. The EMA is conducting a review, but it remains to be seen if the medications are truly responsible for the adverse events. The FDA has already acknowledged the risk of suicide and depression with centrally acting obesity drugs. Analysts remain optimistic about the market potential of these drugs and believe that Novo Nordisk and Eli Lilly will continue to perform well in the long term.

Hot Take: Impact on New Business

The scrutiny surrounding the potential suicide risk of GLP-1 diabetes and weight loss drugs could have a significant impact on new businesses entering this market. While Novo Nordisk and Eli Lilly have established themselves as key players, new entrants may face increased skepticism and scrutiny from investors and regulatory agencies.

On one hand, the concerns about the potential suicide risk could lead to increased caution and tighter regulations for new businesses seeking to develop and market GLP-1 drugs. This might result in a more rigorous and lengthy approval process, making it challenging for newcomers to compete with established pharmaceutical giants. The need for additional safety studies and monitoring could also increase costs and delay market entry.

On the other hand, the spotlight on the potential suicide risk might create an opportunity for new businesses to differentiate themselves by prioritizing safety and conducting more extensive clinical trials. By addressing these safety concerns head-on, new companies could build trust with both investors and consumers, positioning themselves as leaders in the market.

Furthermore, while current concerns focus on GLP-1 drugs, new entrants might consider exploring alternative weight loss solutions that pose lower risks. This could involve developing innovative therapies or solutions that target weight loss through different mechanisms, minimizing the potential for neuropsychiatric effects. By taking a different approach, new businesses could carve out a niche within the weight loss industry.

In conclusion, the scrutiny surrounding the potential suicide risk associated with GLP-1 diabetes and weight loss drugs could pose both challenges and opportunities for new businesses entering this market. Addressing safety concerns, conducting extensive clinical trials, and exploring alternative weight loss solutions could be key strategies for new entrants to navigate this evolving landscape.

Article First Published at: https://www.cnbc.com/2023/07/16/why-suicide-risks-may-spoil-the-debut-of-the-latest-weight-loss-drugs.html

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