Leaning Into Muscle: Opportunity For Myostatin in Obesity

Overview:

• While incretins have blown open the market for obesity medicines, our research shows opportunity for new agents that augment the quality of benefit by preserving lean muscle.
• These newer agents tamp down myostatin and/or activin — negative regulators of muscle growth — with early data showing lean muscle preservation plus greater fat mass loss when used with GLP-1/GIP.
• We've identified multiple shots on goal; Several programs are pursuing differentiated approaches, and we estimate that this market could achieve sales of over US$30 billion by 2035 across a few segments.
• Our full report highlights key companies to watch in this space.

The TD Cowen Insight

Myostatin and/or activin inhibitors could tap into the significant obesity market with increased quality of weight loss to improve metabolic outcomes and decrease bone density loss. Early proof-of-concept data supports the hypothesis of lean mass preservation and increased fat loss when used in combination with a GLP-1/GIP.

Our Thesis

The market for GLP-1/GIPs have validated obesity as a medical condition suited to pharmacotherapy and done so in mega-blockbuster fashion. We estimate that global sales of the class could reach US$139 billion by 2030, including US$57 billion in obesity (for more, see our Ahead Of The Curve® Series report on GLP-1s). This success is due largely to the medications ability to deliver significant weight loss approaching that of bariatric surgery. But even with their success and health benefits, drawbacks have emerged, including indiscriminate muscle loss and the risk of bone density loss. Companies are ramping up efforts to fill this gap via agents that act to inhibit the activin receptor pathway, including the myostatin and activin A ligands. These lean muscle-sparing approaches are being pursued as monotherapy as well as in combination with GLP-1/GIPs where they could synergize to achieve greater fat loss while preserving lean mass.

Clinical data supporting the anti-myostatin/activin and GLP-1/GIP combination hypothesis are beginning to emerge. A leading biotechnology company recently presented interim Phase II results of its anti-myostatin and anti-activin monoclonal antibodies in combination with a GLP-1 that preserved lean mass by 50%-80% with contingent weight loss. Another biotechnology company has also provided clinical proof-of-concept for its anti-(latent)myostatin mAb in combination with a GLP-1/GIP, which drove 55% lean mass preservation versus the GLP-1/GIP alone. We anticipate data from a leading pharmaceutical company's bimagrumab will further contribute to our understanding of this mechanism. Beyond efficacy, tolerability will be a key focus as bimagrumab blocks the entire receptor and could have heightened adverse event risk versus the ligand-targeting approach.

The regulatory path for these agents is uncertain, particularly around the use of lean muscle preservation and/or fat loss as a primary endpoint vs. the more traditional body weight loss. However, recent U.S. Food and Drug Administration (FDA) draft guidance, key opinion leader (KOL) discussions and company checks reinforce our belief that there is an opportunity for these agents to become a new therapeutic tool for treating obesity. Recent FDA guidelines for obesity suggested that there needs to be a 5% or greater total weight loss with the combination. The FDA did also state that there is a potential path forward with a functional endpoint that demonstrates the potential benefit of improving lean muscle mass – KOLs suggest this could be a stair climb, get-up-and-go test or six-minute walk.

As the use of GLP-1/GIP for obesity grows, so will the unmet need to preserve lean mass. We believe quality of weight loss and lean mass preservation or body composition is far too important for long-term health outcomes to be ignored and that this will be figured out. We believe the Agency will recognize the growing unmet need as GLP-1/GIPs are used more frequently and over a longer period of time. As such, we believe the potential benefits of the anti-myostatin and/or activin class will drive greater pharma, regulator and investor interest.

What is Proprietary?

Over the past year, we have accumulated substantial amounts of KOL and industry leader feedback through our proprietary consulting calls, survey work, and our annual Health Care/Therapeutics conferences. This report is supported by six company interviews, literature reviews and conversations with leading myostatin/obesity experts. By leveraging learnings from each of these resources, we tackle key activities and evaluation metrics that can have important implications for product approval success.

Financial and Industry Model Implications

Based on KOL feedback, we believe that there are two potential markets for muscle-preserving medicines which depend on the tolerability of anti-myostatin and GLP-1/GIP combinations with or without anti-activin A. . Activin-based therapies and combination approaches demonstrate an improved efficacy profile by potentially increasing lean muscle mass from baseline, but with the cost of safety (e.g. muscle spasms, diarrhea, canker sores). We also note that lower doses of activin inhibitor or dose titration – as has been employed with GLP-1/GIP therapy – could improve the safety and tolerability. Therefore, our KOLs believe that myostatin inhibitors, if well tolerated in late-stage trials, could be used in the general obese population while activin-based therapies or combination approaches with less favorable safety will be reserved for adults with more severe sarcopenia — defined as the age-related progressive loss of muscle and strength. For these sarcopenic patients, the need to preserve muscle when taking a GLP-1/GIP is much more significant versus the rest of the population.

Myostatin Market

As discussed above, we believe that the market for myostatin inhibitors or other safe muscle-preserving medicines will be the general obese population. Therefore, this market could look fairly similar to the current GLP-1/GIP market. Of the adult population in the U.S., approximately 40% are obese with a BMI greater than 30kg/m2, which leads to approximately 106MM obese adults in the US. We anticipate a myostatin inhibitor might launch as early as 2028 and could be priced at US$4,000 per year based on the current price of GLP-1 therapies and the anticipated future competitive pricing that will be offered. We also anticipate a conservative penetration of 7% by 2035 leading to peak sales of approximately US$30 billion. According to the Centers for Disease Control and Prevention (CDC), approximately 9% of adults are considered severely obese with a BMI > 40kg/m2. We believe that most of these patients will receive a GLP-1/GIP and likely receive a myostatin inhibitor. In addition to these high-risk patients, physician survey data noted that approximately 23% of patients indicate concerns with lean mass loss, while approximately 6% of patients on a GLP-1/GIP discontinue due to lean mass loss.

Activin Combination Market

With improved efficacy, but potentially a hindrance to safety/tolerability, KOLs anticipate that use of combination and/or activin-based therapies will be limited to more severe populations such as the sarcopenic elderly population. There are approximately 63 million elderly patients (greater than 65 years old) in the US and of those approximately 70% are overweight (BMI equal to 25-29 kilogram per square meter (kg/m2)) or obese (BMI greater than 30kg/m2), which is split evenly between the two groups. Of these overweight patients approximately 25% are estimated to have sarcopenia, which leads to an addressable patient population of approximately 11 million. We believe that uptake in this patient population will be relatively modest. We model a potential launch in 2029 and a penetration of approximately 7% in the elderly sarcopenic population by 2035. For the activin/myostatin combination, we estimate a conservative average net price per patient of $6,000 per year based on an increase on top of our estimated cost for myostatin monotherapy per above. This leads to sales of approximately US$5 billion by 2035.

However, there is potential upside to this estimate based upon the data and the patient distribution. Similar to the myostatin market, if the activin combination medicines demonstrate improved weight loss and lean muscle mass preservation compared to GLP/GIP monotherapy, and perhaps most importantly improved safety compared to existing datasets, this could increase the overall penetration and uptake. Additionally, if patients increase the amount of lean muscle, physicians may be more compelled to prescribe these combinations. Patient characteristics will also come into play, specifically comorbidities. For example, approximately 45% of these overweight elderly patients present with Type 2 diabetes. These patients could benefit from a GLP-1/GIP due to the efficacy observed specifically in diabetic patients. The transition to a muscle-preserving medicine combination could be seamless, improve the metabolic health of these diabetic patients and therefore increase the market penetration.

There are additional patients beyond both the myostatin and combination markets that could also be eligible for either therapeutic approach. Specifically, there are "Yo-Yo" patients that go on and off GLP1/GIPs multiple times as they lose weight, gain weight and then lose weight again in a cycle. These patients are at a higher risk of developing sarcopenia with each subsequent loss of lean mass and regain of fat mass. Therefore, these patients could reach both markets, first in the myostatin market to potentially deter sarcopenia onset and second in the combination market if the patients receive a sarcopenia diagnosis.

What to Watch

The pace of data readouts for this class of drugs is accelerating and there are several upcoming catalysts this year and next that could help determine the true potential of myostatin and activin inhibitors on top of GLP-1/GIP therapies. Of the companies currently developing one of these muscle sparing agents, two reported successful proof-of-concept data this month in obesity patients.

We believe the greatest focus will be on the Phase II proof-of-concept data for the bima + GLP-1 combination as these data will elucidate how the full receptor blockade can drive superior lean mass benefits. Importantly, the ability to titrate patients to improve the tolerability profile will be a key focus. Additionally, a biotechnology company will present the full 26-week interim data in the second half of 2025 with topline 52-week data expected during the first half of 2026 that will explore the ability to maintain weight loss and body composition with myostatin monotherapy and the removal of GLP-1/GIP therapy.