Venture investors have long been active backers of startups developing obesity and weight loss treatments, and they’re holding strong in the GLP-1 age. It helps, of course, that there are big returns happening as well.
Case in point: Three-year-old Metsera, a developer of oral and injectable drugs for weight loss, just delivered one of the sector’s largest M&A deals to date. In a deal with Pfizer announced late last week, the pharma giant agreed to pay up to $10 billion for the New York company, following a litigious bidding war with rival Novo Nordisk.1
The planned purchase comes only nine months after Metsera made its Nasdaq debut. Just last year, the company also disclosed over $500 million in venture funding, with Arch Venture Partners as its largest stakeholder.2
Venture funding around obesity and weight management
Metsera is one of several companies that raised sizable venture funding in the past couple of years with a focus on obesity and weight management. For a bigger picture of where investment is going, we used Crunchbase data to assemble a sample list of 17 such startups funded in roughly the past couple years.
It’s a biotech-heavy list, reflecting a shift away from the pre-GLP-1 mindset that obesity could be curbed through dieting, exercise and willpower alone. Today, nearly 12% of American adults have used GLP-1 weight loss drugs, per an August Rand report. Another 14% said they are interested in using those drugs.
Popular as the current crop of medications have become, however, startup investors believe there is more innovation ahead. To that end, they’re backing a number of quite large rounds.
Largest funding recipients
The largest funding round for a company on our list is also among the most recent. Kailera Therapeutics, a developer of injectable and oral GLP-1 therapies to treat obesity, closed on $600 million in Series B funding last month. The Waltham, Massachusetts- and San Diego-based company also recently reported positive clinical trial results for obesity patients in China.
London-based Verdiva Bio, a developer of GLP-1 treatments for cardiometabolic conditions, is another VC favorite. The company launched out of stealth in January with $411 million in Series A financing led by Forbion Capital Partners and General Atlantic.
Not everyone raising a good-sized round is on the GLP-1 track. Boston-based Syntis Bio, which picked up a $33 million Series A this summer, develops oral treatments that harness the therapeutic potential of the small intestine to treat multiple conditions, including obesity. And Helicore Biopharma secured $65 million in January to further develop a class of therapies based on GIP, or gastric inhibitory polypeptide, antagonists for obesity and related conditions.
Exits, too
We’ve also seen a handful of good-sized exits in the past couple years.
On the IPO front, BioAge Labs, which says it is “harnessing the biology of human aging” to develop new therapies for obesity and metabolic diseases, went public on Nasdaq just over a year ago, after raising over $290 million in venture funding. Thus far, it hasn’t performed well, with shares trading well below the initial offer price.
As for M&A, Versanis Bio, a startup developing drugs with applications in obesity treatment, delivered one of the larger outcomes for the space two years ago, with Eli Lilly agreeing to buy the company in a deal valued at up to $1.9 billion.
More recently, we saw a unicorn acquire a startup in the space, with wellness-tracking ring maker Oura buying Veri, a developer of tools for people to track their metabolic health, for an undisclosed sum.
Promising times
Overall, these are promising times for those who’ve long struggled with obesity and the unpleasantries of dieting-induced hunger pangs or the difficulties of maintaining a desired weight range.
That said, there’s room for improvement. Roughly half of GLP-1 users surveyed by Rand, for instance, said they have experienced nausea as a side effect, while about one-third reported diarrhea.
Personally, I’m still awaiting the ultimate metabolic miracle treatment. This would ideally allow a user to eat unlimited amounts of junk food, abstain from vigorous exercise, and not gain any weight or suffer any unpleasant side effects. For now, it looks unlikely that venture-backed startups will be delivering on this particular vision.
Related Crunchbase list:
Related reading:
Illustration: Dom Guzman
Novo Nordisk, maker of the leading GLP-1 branded medications Wegovy and Ozempic, had offered to buy Metsera in a deal valued at up to $10 billion, superior to a prior offer by Pfizer. Pfizer then sued Novo Nordisk, calling its bid an “illegal attempt by a company with a dominant market position to suppress competition.” Pfizer then raised its offer price and Metsera’s board voted to accept the offer.↩
Arch had a 23.5% post-IPO stake in the company.↩
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