Health Check: Big Pharma vies for the fat rewards of the anti-obesity market

• Pfizer has won a spirited bidding war for the GLP-1 drug developer Metsera
• Pharmx launches its eBay for chemists
• Gough-era biotech stocks maintain the rage  

A fierce US$10 billion bidding war for the Nasdaq-listed anti-obesity drug maker Metsera has resulted in Pfizer emerging with the fat spoils.

On Friday, Metsera accepted Pfizer’s improved offer.

Overnight the rival bidder, Denmark’s Novo Nordisk, pulled out.

Metsera had deemed Novo’s bid to be superior, but accepted Pfizer’s offer when potential US competition issues emerged.

According to Reuters, the win gives Pfizer an entree into the lucrative obesity drug market, even though Metsera’s treatments still are years away from getting to market.

The maker of Ozempic and Wegovy, Novo is trying to claw back lost ground against arch-rival Eli Lilly, which owns Mounjaro and Zepbound.

Last week Novo cut its sales and profit forecasts, dubbing the obesity market as “more competitive than ever”.

The Metsera-less Novo now will “advance its own pipeline of treatment options for obesity”, while keeping a weather eye on acquisitions.

‘Game of Thrones’

Metsera’s injectable GLP-1 candidate is experimental, the takeover battle has been described as unusually fierce.

One fundie even describes it as a “Game of Thrones-level of play” – presumably without the raunchy bordello scenes that characterised the first series.

Another pharma chief is reminded of Pfizer’s US$90 billion hostile takeover of Warner-Lambert in 2000. This one was all about owning the blockbuster cholesterol drug Lipitor.

It certainly shows that despite the scepticism about GLP-1s being miracle fat busters, they’re not going away in a hurry.

Australia doesn’t have any GLP-1 drug makers, but their growing usage directly affects ResMed (ASX:RMD).

That’s because of the proved nexus between obesity and chronic snoring.

But rather than detract from Resmed’s sales, patients could use GLP-1s in combo with Resmed’s sleep apnoea masks and machines for superior results.

Will Island be subject to Animal Rule?

As Island Pharmaceuticals (ASX:ILA) awaits a key US Food & Drug Administration (FDA) decision on the conduct of a proposed trial, Research as a Service (RaaS) has ascribed a 76 cents per share valuation to the stock.

This implies 65% of upside.

The antiviral therapy outfit has two key assets: ISLA-101 for dengue fever and the acquired Galidesivir for a number of diseases (starting with Marburg).

By Thursday our time, the FDA should have decided on whether Island can apply the ‘Animal Rule’ to its Marburg trial.

This accepts that as with Marburg’s cousin Ebola, the disease is too dangerous to be tested on humans.

“We like Island’s approach of focusing on existing drugs that can be repurposed, as considerable time, effort and investment has already been spent,” RaaS opines.

Clinical data to date shows Galidesivir was 94% effective in Marburg-infected primates, compared with zero survival for the untreated group.

Galidesivir also could be effective against other nasty viruses including Ebola, measles, Covid, Zika and yellow fever.

Meanwhile, the mosquito-borne dengue infects about 400 million folk a year, with no approved therapy and limited vaccines.

Just the prescription for Pharmx

While Sigma Healthcare (ASX:SIG) dominates the ASX-listed pharmacy sector after merging with Chemist Warehouse, the low-key PharmX Technologies (ASX:PHX) is positioning itself as a behind-the-scenes supplier to our apothecaries.

Pharmx has launched a new platform, Marketplace to provide a “unified, modern ordering experience for Australian pharmacies”.

The company will migrate its customers from its old Pharmxchange platform.

Pharmx claims coverage of 99% of Australian and NZ pharmacies, with $23 billion transacted last year.

Addressing the company’s AGM this morning, chairman Nick England said the Australian pharmacy market remained “highly attractive, driven by population growth, demographic shifts and [favourable] regulatory controls”.

Pharmx expects the trans-Tasman retail pharmacy market to grow at an annual compound rate of 7.6%. At the same time, “efficiency and technology investments remain crucial”.

Pharmx shares have doubled over the last year, valuing the company at just under $100 million.

Lest we forget the Gough stocks

In the rare event that you haven’t heard, 50 years ago to the day the Governor General did a whack job on the PM.

The Dismissal is not the only golden anniversary to be celebrated/commiserated.

In 1975, scientists formed contract drug manufacturer IDT Australia (ASX:IDT) as an offshoot of the Victorian College of Pharmacy.

IDT listed in 1998 and remains so today, although not surprisingly its remit has changed over the years.

Medical Developments International’s (ASX:MVP) predecessor company was formed in 1972, the year of Gough’s breakthrough election. The company listed in 2003.

Local ambos have used Medical Development’s fast-acting painkiller Penthrox since 1975. The product essentially remains the same.

Given their longevity, there’s a good chance these companies will be around in another 50 years – and the Canberra commentariat will still be writing about Gough.

But both stocks have delivered sub-par returns over the last five years or so. It’s Time for better returns.

Vaxxas snares a CEO – as a director

Speaking of Medical Developments, potential IPO candidate Vaxxas has appointed its CEO Brent MacGregor to the Vaxxas board.

The Brisbane-based Vaxxas is developing a high-density microarray patch, enabling needleless self-delivery of vaccinations.

Prior to Medical Developments, MacGregor had senior roles at CSL Seqirus, Novartis Vaccines and Sanofi Pasteur. In all, his experience spans three decades over four continents.

The timing is intriguing given Vaxxas CEO David Hoey in August “transitioned” to strategic advisor.

Hoey had led the company since 2012, playing a pivotal role in commercialising the University of Queensland tech.

His exit followed a $90 million raising – $50 million of equity and $40 million of debt. While chunky, this fell short of the targeted $110 million.

Still, Vaxxas means business. The company has completed six phase I trials to date and has installed state-of-the-art robotics at its 5500 square metre Brisbane facility.

The trials have involved over 750 participants and covered lurgies including Covid, flu, measles and rubella.