How one VC is investing in weight-loss drug market

Plenty of big pharma companies are betting on weight-loss drugs, including Pfizer (PFE), Novo Nordisk (NVO), and Eli Lilly (LLY). But there are plenty of other companies, including startups, that are trying to get a piece of the weight-loss market.

Portal Innovations Co-Founder and CEO John Flavin is investing in some of those endeavors. "We're seeing a pipeline of about 240 companies that are either developing or are moving toward the market with obesity or cardiometabolic drugs," he says. Flavin cites a company he is investing in that targets a different "pathway" than GLP-1s to fight obesity.

Flavin thinks that though a lot of money is being invested into the weight-loss market, plenty of cash will continue to flow to other areas in the biotech space. The big reason? Both venture capitalists and big pharmaceutical companies have money to invest.

Watch the video above to hear where else Flavin says money is being invested in the biotech space.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Stephanie Mikulich.

Video Transcript

Pfizer says it will proceed with the once daily version of its weight loss pill.

The company among the many drug makers racing to grab a portion of the weight loss market potential.

This year alone, the US weight loss market is expected to grow another 4.3%.

That's a point of market data as interest in this space continues to rise.

More eyes are set on how to get in on the action here to discuss ways to navigate the shifting bio sector.

We have John Flavin portal innovations founder and CEO along of course with Julie Fine Young finance is Julie Hyman John.

It is good to see you.

So this this GOP one fight.

It it only continues to send me heat up John.

And of course, we've been focused on big big Pharma.

I'm I'm curious though John as a venture investor.

Are you seeing this trend?

This theme that investors are are so interested in?

Is it also playing out John in the start up space?

Absolutely.

You know, if you look at what's happened in the G LP one space which by the way has taken several decades to play out, you know, dating way back to when G LP one was first cloned uh by Svetlana Muso, you know, way back when it's finally coming to fruition.

And when we think about the stats in the market, 40% of Americans today are obese, the expected global market for obesity drugs by 2030 is is expected to grow to $100 billion.

And so the stats are showing that there's a, a major market need.

The science is moving in a direction that's opening up opportunities to actually make a market impact for these patients that by the way have comorbidities like uh diabetes and other heart issues.

So we're seeing uh a pipeline of about 240 companies that are either developing or are moving toward the market with obesity or cardiometabolic drugs.

We've got a partnership with Novo in place.

Um and we've identified companies that we'd like to coves in that are all in that cardio metabolic arena.

So one company we like a lot that we've invested in directly is cus they're developing a next generation pill that's coming at a different pathway than G LP one.

But huge opportunity and a lot of capital going into that space, a lot of capital going into that space, John, is it coming at the expense of other areas?

Right.

Certainly in the public markets, we've been talking a lot about G LP ones.

There's been huge investment in those publicly traded stocks.

Um I is that happening in the private markets as well?

And are other areas, other treatment areas getting starved a little bit because of that.

No, I think, you know, you've got to look at the dry powder that's been accumulating here in the past couple of years.

Uh Both at the big pharma level and at the VC level.

So record levels of LP money going into biotech directed venture funds, uh over 25 billion just last year into fresh powder.

Uh just last week, uh flagship announced fund 83.6 billion going into 25 start up.

Um that will be a uh an array of companies that go well beyond obesity, things that we see really getting a lot of focus and attention with dynamic science happening.

Um outside of the cardio metabolic space are neural.

We're seeing a lot of good companies um in, in that space.

And I think the on the heels of the Eli Lilly news, uh with regards to their Alzheimer's drug that got FDA approval showing 30% reduction um in in cognitive failures.

Uh for that uh class will be a gateway to many other companies that will focus in the Neurospace.

So companies like van working on Parkinson's venture backed company here in Chicago, Nemuro um gate in in Indianapolis with the halo effect of what's happening uh coming out of Eli Lly.

And then lastly, a lot going on in autoimmune disease, especially uh in areas like Lupus and, and, and also tech bio, you're seeing a lot of A I focused and enabled science that I think will accelerate some of the work in these neuro drug programs.

And John, you know, another trend we talk about here on the show you won't be surprised to hear is the mega trend of A I I am curious John, how that technology is impacting and transforming your world, you know, life science is investing.

Yeah.

Well, first, you know, from the aperture of the venture capitalists, um we have developed our own tool called star gaze, which is an A I enabled platform that can predict innovation and start to rank innovative uh inventors coming out of universities.

Remember the lifeblood of a of a new drug starts uh on the bench at a university um several years prior to it becoming a drug.

And so um we're using this tool to mine the universe to identify who's working on what hot area of technology, how do we get there first to make those investments and using the machine learning algorithm, we can use predictive biomarkers to who might be a promising up and coming scientist working on the latest, cutting, cutting edge science anywhere in the world, but certainly here in the United States.

Now, if you look at the locations in science, we've got a company here in Chicago, Tempus I I that went public a few weeks back, precision medicine.

So using A I for accelerating, figuring out what drugs are gonna work with, which patients in any kind of disease ranging from cancer to, to uh cardio metabolic diseases.

Um You've got other companies like Recursion Pharma out in Salt Lake City that's applying uh tech bio and A I to identifying drugs in both neural and oncology.

Um That space is heating up very quickly and I think you're gonna see, you know, strong benefits to what's happening in that regard.

Lastly, really way out there in the future is quantum.

So uh believe it or not quantum is really starting to get applied to life sciences as well.

So the ability to simulate the drug discovery process and take shortcuts and accelerate going from a Petri dish all the way to a patient.

Um I'm really excited about what will happen in the next decade in that area as well.

A lot going on in a fast moving industry, John, thank you so much for joining the show today and walking us through it.

My pleasure, Josh and Julie.

Good to see you.