Eli Lilly and Novo Nordisk’s obesity moat just got stronger

Amgen reported on Tuesday that its highly anticipated obesity-drug candidate, MariTide, helped patients shed around 20% of their body weight, though side effects such as nausea and vomiting were common. The company didn’t disclose detailed data, which is expected at a medical conference next year. If all goes well in a larger late-stage study, Amgen could have a drug on the market within a few years.

But what we already know suggests that Lilly and Novo Nordisk’s market leadership isn’t about to be upended. Not only did MariTide fail to outperform Lilly’s Zepbound, but both Lilly and Novo also have next-generation medications under development, with promising data showing even more impressive weight loss results.

“A 20% weight loss would have been best-in-class if it came a few years ago, but at this point, Novo Nordisk and Eli Lilly have drugs in the pipeline that could meet or exceed 25% weight loss," wrote Nicholas Anderson, portfolio manager at Thornburg Investment Management. “On top of that, their drugs are completing phase 3 trials imminently, while MariTide just wrapped up phase 2 and will still need to run a large, expensive phase 3 program."

Introducing a novel medical approach doesn’t guarantee lasting leadership in the pharma business. Take the statin market as an example: Merck was first to market with Mevacor, launched in 1987. But Pfizer’s Lipitor later overtook it, becoming a blockbuster owing to its superior efficacy. Lipitor, in turn, faced competition from AstraZeneca’s Crestor.

In the obesity category, though, it seems the first movers are likely to remain the leaders. There are dozens of companies—ranging from big pharma players, including Amgen, Pfizer and AstraZeneca, to smaller biotech firms such as Viking Therapeutics and Structure Therapeutics—working on drugs that could eventually grab a piece of this market, expected to become the greatest pharmaceutical bonanza of all time. While competitors have promising approaches that could offer patients different treatment modalities, none have shown the potential to truly dethrone the current leaders.

MariTide’s mechanism of action seems to provide certain advantages. While Zepbound and Wegovy are peptide-based drugs that activate GLP-1 receptors directly to induce weight loss, MariTide uses an antibody connected to a peptide, which could improve durability and potentially minimize weight rebound. The increased durability allows MariTide to be effective with less-frequent dosing, which is why investors were excited to see the data.

But with any drug, investors are going to scrutinize two key things—efficacy and side effects. On both counts, MariTide looked good, but it wasn’t a home run. In the trial, participants in the group receiving progressively higher doses of the drug experienced a discontinuation rate of about 11% because of side effects, with fewer than 8% dropping out because of gastrointestinal issues. Amgen reported that 70% of patients in that group experienced nausea and 40% experienced vomiting, though those symptoms typically resolved.

To capture a piece of the market, Amgen doesn’t need to be the best: Say that its advantage of being longer-acting winds up giving it a 10% market share. That is still a notable piece of a market projected to reach $100 billion in annual sales.

For investors, Amgen presents an attractive entry point, as its shares are largely discounting the opportunity. Its stock trades near levels seen before the company announced its obesity portfolio. Evan Seigerman, an analyst at BMO Capital Markets, notes that MariTide’s once-monthly injection also offers a manufacturing advantage, while its improvements in blood pressure could signal wider cardiovascular benefits.

Competitors are coming to the obesity market. But for now, at least, they are fighting for the scraps.

Write to David Wainer at david.wainer@wsj.com