The meteoric rise of a new class of weight loss drugs over the past two years, known as GLP-1s, has seen a new name take the title of Europe’s most valuable company, helped a country dodge a recession and hit grocery sales in the US.
The valuations of the companies that make this so-called “miracle” class of drugs — which includes Danish pharma giant Novo Nordisk (maker of Ozempic and Wegovy) and US rival Eli Lilly (maker of Mounjaro and Zepbound) — have soared as investors bet big on a medication projected by some to hit $150bn in sales by the early 2030s.
The potential of the market has not been lost on founders.
It’s a “huge” opportunity, says Kai Eberhardt, the founder and CEO of Oviva, a Swiss weight loss management platform which operates in the UK, France and Germany, alongside its home market. It began offering GLP-1 drugs as part of its treatment options in the second quarter of this year. Founders and investors see massive potential in the new drug class — but funding is yet flood startups in the sector
“For us [GLP-1 drugs] are already a strong growth driver,” he says. “The newer GLP-1 class of medications have created real excitement due to their impressive outcomes in weight loss, transforming the treatment options available for those living with obesity.”
While treatment involving GLP-1 drugs is currently a small part of Oviva’s overall business — Eberhardt says it’s growing total patient and revenue numbers by “double digit” percentage points year-on-year — the meds could become the startup’s “largest” growth driver in the future, he tells Sifted.
Riding the wave
Oviva’s not alone. There are a slew of startups in Europe looking to tap into the opportunity — many of which have recently shifted operations to focus on selling GLP-1 drugs or provide treatment pathways around the medication, which was first designed to treat diabetes but was later found to be effective at suppressing appetite and helping people lose weight.
In the last two years GLP-1s have become a go-to weight loss solution popularised by a roster of celebrity users. According to Walmart’s CEO, food sales have fallen as the one in eight adults in the US who have used the meds slim down their buying habits. The drug class has also seen Novo Nordisk overtake luxury fashion brand LVMH as Europe’s most valuable company, propping up Denmark’s GDP in the process.
All of the attention has got VCs excited, and companies on both sides of the Atlantic have convinced them to get out their chequebook: Danish startup Embla, which prescribes GLP-1 meds alongside ongoing clinical care and lifestyle advice for patients looking to lose weight in its home market and the UK, picked up a €10m Series A in August 2023 a year on from a €3.5m seed round. Swedish startup Yazen, which says it too prescribes GLP-1 drugs in combination with clinical care, also raised €3.1m last summer.
Many startups operating in the GLP-1 space didn’t start life offering them — largely due to launching before the drugs were popularised for weight loss. Ozempic was approved for sale in the US in 2017 and Europe in 2018; Wegovy was approved in the US in 2021 and Europe in 2022.
UK-based Numan, a digital medication and supplements provider founded in 2016, started by selling sexual health treatments; it began prescribing weight loss drugs in 2022. For years the company marketed itself as a “men’s health” brand, but has recently changed that. The company’s website uses images of men and women on its landing page for weight-loss treatments.
Yazen, which launched its weight loss service in 2022, initially set out to exclusively target obese men, but broadened its focus before launching to include obesity more generally, after seeing how effective GLP-1 drugs were, says CEO Fredrik Meurling.
Meurling tells Sifted it had hit €14m annual recurring revenue and treated 15k patients by June this year. It’s now active in Sweden, Norway, The Netherlands and Spain, and has pilot projects in England and Germany.
Other startups like UK-based Manual, which like Numan started out offering men’s sexual health treatments, also started prescribing weight loss medications in 2022.
“[GLP-1 meds] are a game changer,” says Michael Treskow, partner at Eight Roads Ventures, adding it would be “strange” if a startup working in the weight loss space wasn’t looking into how they could add the drugs into their offering.
While GLP-1 meds have been part of some treatment courses at Embla since it launched in 2021, the “hype” surrounding the drug class has “opened doors” for the startup, says co-CEO and cofounder Nicholas Syhler — adding that the startup managed to raise its €400k pre-seed round in 2021 just three weeks after incorporation. It’s now gearing up for a fundraise in 2025 and expanding to the US, where it’ll look to target US employers — who pay for the majority of healthcare in the country.
Kinks in the supply chain
There are still big questions hanging over European startups in the sector — not least around whether a European GLP-1 startup can raise the kinds of funds needed to hit real scale.
Some of the biggest rounds for startups vending GLP-1 drugs have been in the US, including Calibrate’s $100m in 2021 and Form Health’s $38m in June this year. In Europe, no company selling the drug or treatment pathways around it has raised more than €10m in a single round.
Investors and founders tell Sifted supply chain issues are part of that problem. Manufacturers have struggled to keep up with demand for the drug, and last year, startups in the UK were told by the government to remove Ozempic from sale due to shortages of the drug for diabetics — Manual was still selling past the deadline.
If a startup’s revenues are closely tied to the availability of those drugs, they could be at the mercy of manufacturing capability. But as pharma bolsters production capabilities those issues could diminish, says Christoph Ruedig, partner at Albion VC.
“As there are severe shortages of GLP-1 drugs in Europe (Eli Lilly and Novo Nordisk are prioritising the US as pricing is higher) the opportunity to date in Europe has been limited but growing.”
Who’ll stump up the cash?
There’s also a challenge finding the right people to pay, and in Europe, national healthcare providers need to open up to reimbursing startups providing weight loss care, investors say.
While Numan’s head of medical Luke Pratsides says that the “success of private sector companies offering GLP-1 [drugs] shows that the public are willing to pay to meet a significant need that is being underserved by the NHS”, many in the sector think that only serving consumers paying out of their own pocket won’t be enough to hit real scale.
“US investors have told us that they will only invest in companies that get on enterprise contracts [selling to whole organisations like health insurers],” says Syhler. “This means proving that they can deliver high-quality and sustainable care — where the economics and outcomes make sense long-term for both patients and payors.”
In Europe, where the majority of people have their healthcare paid for by the state, hitting scale will likely come down to whether or not companies can get their services reimbursed by national healthcare providers, say some investors.
In the UK Wegovy is approved for use to manage obesity in the NHS, but it is currently only available through specialist weight management clinics, limiting availability.
Oviva is one the few startups that has had its supply of GLP-1 drugs alongside its weight loss platform reimbursed by the NHS — but it had a head start on others, being reimbursed by the organisation long before the rise of weight loss meds, in 2016. Embla co-CEO and cofounder Laust Axelsen tells Sifted that it’s in “mature dialogues with several health systems”.
“It is still a struggle with reimbursement, in every country,” says Hekla Arnardottir, partner at Crowberry Capital, which has backed Embla, pointing to difficult regulation and healthcare systems that don’t always want to work with startups. Without reimbursement in Europe, she adds, it will be hard for companies to reach the sort of revenue figures needed to raise growth capital and hit unicorn status.
Whether a European startup will be able to do that remains to be seen — but what is clear is that the hype surrounding GLP-1 meds is unlikely to die down anytime soon. “I’ve never been an investor in a company that’s got so much attention — in a space that’s got so much attention,” says Arnardottir.
Read the orginal article: https://sifted.eu/articles/startups-wegovy-ozempic-shift/
