JP Morgan Targets Weight Loss Drugs With $500M Fund
The current “duopoly” in the GLP-1 game figures to be short-lived as more investors enter the space, experts say
JP Morgan Private Capital, a venture capital and growth equity investment team under JP Morgan Asset Management, has raised over $500 million for a life sciences fund targeting private biotech companies and the booming weight-loss drug space.
The new fund is led by chief investment officer Stephen Squinto, PhD, and managing partner Gaurav Gupta, MD, who were hired by JP Morgan Asset Management in 2022.
“The top three choices are obesity, obesity and obesity,” Squinto told Bloomberg, referring to the closing of the fund. He noted that weight-loss drugs are all the rage and that the field is “wide open.”
“This has the opportunity to be a pivotal moment in the pharmaceutical industry,” he said.
Weight Loss Drug ‘Duopoly’
The anti-obesity drug space has two pharmaceutical giants going head-to-head: Novo Nordisk and Eli Lilly & Co., both of which are grappling with supply shortages due to consumer demand.
The shortages have led telehealth company Ro (which offers Ozempic, Wegovy and also compounded versions) to launch an open-access GLP-1 Supply Tracker for consumers to crowdsource data and either find GLP-1s or report that they’ve found a supply.
Goldman Sachs analyst Salveen Richter described a “duopoly situation” regarding the two weight-loss drug manufacturers this week on Yahoo Finance Catalysts and shared that Zealand, Amgen and Regeneron could become competitors.
It’s a sentiment that Gupta shares, “It’s very unlikely that the future of obesity treatment will be dominated by a stable duopoly,” said. “There will be significant winners.”
Five investments have been made so far, according to Bloomberg, only one of which has been made public: Enlaza Therapeutics, a biotech startup that raised $100 million in a Series A for its biologic cancer drugs and clinical trials.
Rise of Generic GLP-1s
While Novo Nordisk and Eli Lilly struggle to increase manufacturing capabilities to meet demand, companies like Hims & Hers are presenting compounded GLP-1s as a more accessible and low-cost option. In May, the telehealth company announced it would enter the weight loss medication space and partnered with a U.S. drug manufacturer to provide generic medications with the same active ingredients as Ozempic and Wegovy.
Competing with Hims & Hers will be Whole Health Rx, a telehealth service recently launched by The Vitamin Shoppe that will offer nutritional supplements, name-brand GLP-1 drugs and compounded versions of semaglutide and tirzepatide, the active ingredient in Zepbound.
Last month, Men’s health company Mangoceuticals, Inc (aka MangoRx) announced it will make oral semaglutide (Slim) and tirzepatide (Trim) available on its telemedicine platform in Q3 for $299 and $399/month, respectively.
“Our goal is to provide patients with a convenient and effective way to manage their weight and improve their overall health,” MangoRx CEO and co-founder Jacob Cohen said. “We believe that these oral formulations have the potential to significantly impact the lives of millions of people worldwide.”
