China is an open goal for Novo Nordisk’s obesity drug

In China, as in many other countries, slimness is an oft-promoted beauty standard. But the actual statistics in the country, with more than half the population classified as overweight, tell a different story. This is good news for Novo Nordisk’s obesity drug Wegovy. 

Wegovy, which contains the active ingredient semaglutide, has been approved in China for long-term weight management for overweight and obese people. The Danish drugmaker has little competition and massive demand it can take advantage of.

The supply of drugs containing semaglutide has been highly controlled and limited in mainland China as, until now, they were approved only for the treatment of type 2 diabetes. Even so, the market was valued at about $1.7bn last year, according to analytics group Clarivate. A severe shortage in the country has resulted in the drugs trading at well over double their prescription price on the black market.

There are just two local drugs that have already been approved for weight loss — Huadong Medicine’s liraglutide and Benamae Pharma’s beinaglutide. There is a strong pipeline of local rivals that are in their final stages of clinical trials. But they will have a difficult time commercialising the drugs in the short term due to Novo’s patent on semaglutide that runs through 2026. Shares in Huadong, down 30 per cent in the past year, reflect investors’ pessimism on the local sector despite promising developments.

That may be too harsh — at least considering their long-term prospects. Demand for weight loss drugs is set to grow at unprecedented levels. In China, the number of adults overweight is expected to triple, with the number of people classified as obese projected to increase more than sevenfold by 2030 from 2000 levels, according to Chinese public health research.

There is even bigger potential for export. India has the third-largest number of people living with obesity, behind China and the US. Novo Nordisk’s Wegovy and Ozempic, plus Eli Lilly’s rival product, are not available in India. There are no plans in the near future to supply the country due to global shortages. Ozempic is designed for type 2 diabetes but is often used off-label for weight loss purposes. More than a tenth of the Indian population is estimated to be living with diabetes. That should give Chinese weight loss drugmakers room for growth in the longer term.

In the meantime, Novo stands to gain an exceptional windfall in one of the biggest markets in the world.

june.yoon@ft.com