MW Why this newly public biotech could become a force in obesity treatments

By Ciara Linnane

Metsera's GLP-1 peptide has a long half-life, meaning it could be administered once a month. And the company is ready to scale up.

There's a new kid on the block when it comes to drug companies developing treatments for obesity, and this one has a clear advantage over rivals.

Metsera Inc. (MTSR), a New York-based biotech that went public on Jan. 31 with some fanfare, has a full portfolio of weight-loss drugs in development, using both the hormones already used in existing treatments, as well as an oral peptide delivery technology, according to Evercore ISI analysts.

More importantly, the company already has a fill/finish and sterile injectable manufacturing arrangement lined up via a partnership with generics company Amneal Pharmaceuticals Inc. $(AMRX)$, analysts Umer Raffat and Michael DiFiore wrote in a note the clients published Tuesday.

That means they are ready to scale up, assuming clinical trials under way deliver the right results.

That's not all. Metsera's GLP-1 peptide also has a long half-life, which could allow for monthly dosing, a more convenient administration system than the current approved drugs, which require weekly injections.

"Between the long half-life of GLP-1 peptide and slightly improved bioavailability in oral tech, Metsera's API math for oral is quite reasonable/doable," the analysts wrote.

API stands for active pharmaceutical ingredient, a foundation for drug development that also covers product safety and efficacy. Using less API will help reduce the company's costs and make it more competitive in scaling up, the analysts said.

Evercore initiated coverage of Metsera with an outperform rating, the equivalent of buy.

Metsera, which was founded in 2022, hit public markets at the end of January, when it priced 15.28 million shares at $18 apiece to raise $275 million. Principal shareholders of the company include Arch Venture Partners and Validae Health L.P., both of which sold shares in the IPO.

Evercore was one of five banks that worked on the deal, with the stock closing up 47% on its first trading day.

The company's leading candidate MET-097i is currently in Phase 1/2 clinical trial in the U.S. in participants who are obese or overweight but otherwise healthy.

Preliminary data released last September showed participants lost placebo-adjusted body weight of 11.3% after 12 weekly doses of 1.2 milligrams, and 7.2% after 12 weekly doses of 0.6 mg, the company disclosed in its IPO documents.

The drug was well-tolerated with no serious adverse events and no severe gastrointestinal adverse events, which are an unfortunate side effect of other weight-loss drugs.

The company has launched a 28-week, double-blind, placebo-controlled Phase 2b clinical trial of MET-097i aimed at evaluating safety and efficacy at different weekly doses in participants with obesity or overweight without Type 2 diabetes (T2D), with a data readout expected by mid-2025. It's also planning a Phase 2b trial for patients with obesity and T2D.

If successful, it will launch a Phase 3 trial in the U.S. and various European countries and will pursue regulatory approval in the U.S.

The Evercore analysts noted the company's management team has a lot of clinical development experience, after dosing more than 90,000 patients while at Medicines Co., a former employer.

The company could capture a 24% share of the overall obesity market by 2032, according to Evercore. That would be equal to $2.7 billion in sales, rising to almost $4 billion by 2035.

Evercore estimates that should lead it to a valuation in the high 40s, or about 72% above its current price.

Scalability is a challenge facing other companies in the weight-loss space. Viking Therapeutics Inc. $(VKTX)$, for example, has delivered promising results for its therapy, but may need to partner with, or be taken over by, a bigger player once it needs to scale.

The SPDR S&P Biotech exchange-traded fund XBI has fallen 6% in the last 12 months, while the S&P 500 SPX has gained 17%.

Read now: What's next for hot biotech stock Viking Therapeutics? Here's how the company can scale up.

Read also: Eli Lilly cuts price of weight-loss drug Zepbound as competition heats up

-Ciara Linnane

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February 25, 2025 13:42 ET (18:42 GMT)

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