If you're a biotech developing next-gen obesity treatments, here's how you can position for BD success with Pharma

I asked Sleuth to analyze 700+ obesity biotech portfolios against Pharma's strategic gaps - two key positioning strategies emerged:

1. Focus on complementary mechanisms to backbone therapies.

Differentiating with dual/triple incretin agonists (GLP-1R/GIPR/GCCR) is increasingly tough. These targets are saturated among major players - you need an angle that solves key issues existing "anchor programs" will face:

• Muscle preservation (ex: Lilly/Versanis - $1.9B)
• Combo synergies (ex: Novo/Lexicon - $1B)
• Oral treatments (ex: Novo/Septerna - $2.2B)
• Novel MoAs (ex: Novo/Inversago - $1.1B)

A few major Pharma remain largely on the sidelines (JNJ, BMS, Novartis, Sanofi) and might take a bet on a late-stage anchor asset, but mgmt. teams don't want "me too" programs here and they'd likely target de-risked late-stage assets (i.e. Viking), meaning immense capital requirements for earlier-stage biotechs.

2. Think post-GLP1 world in a tightly managed indication.

CV / Metabolic is heavily managed by payors. In fact, obesity exhibits all key traits for the most heavily managed indications:

• Heavy Pharma presence (cross-portfolio rebates)
• High competition (payor negotiation leverage)
• Lower risk with disease progression (not immediately fatal)
• Huge patient population (high cost category = more scrutiny)

And here's how that plays out:

As Lilly/Novo ramp to massive volumes, they negotiate preferred formulary status for additional rebates to payors/PBMs. While potentially subject to reform in the future, these rebates favor incumbents over new launches with no volume. They can also bundle rebates across their broad metabolic portfolios (similar to AbbVie's I&I strategy). These assets will eventually go off patent (2032 / 2036+) creating lower-cost options that payors will prefer patients to step-through.

So, how do biotechs approach this? Niche down:

• Anchor along cormobidity-specific indications. Obesity complications include MASH, CKD, osteoarthritis, AFib, etc. Targeting these alongside obesity allows for separate reimbursement channels vs. catch-all drugs
• Find underserved patients in the post-GLP1 world - non-responders, rebounders or those with unacceptable GI side effects. Design trials around them. Being the preferred 2L treatment is still a huge opportunity with ~50% of patients discontinuing tirzepatide/semaglutide in year one.