Big pharma’s next $10 billion gamble: Ozempic for your brain

A new wave of treatments for a rare illness are being touted as the next major breakthrough from the same class of drugs as Ozempic, sparking multibillion-dollar acquisitions from pharmaceutical giants but caution from experts who warn that more testing is required.In June, pharmaceutical giant Eli Lilly completed a $US7.8 billion ($10.88 billion) acquisition of Centessa, a company that is developing experimental treatments for a range of rare sleep disorders.Drug giant Eli Lilly has spent $10.88 billion on a company developing sleep paralysis treatments.APThe move by Lilly, the world’s most valuable pharmaceutical company, with a $US1.1 trillion ($1.5 trillion) market capitalisation thanks to the rise of glucagon-like peptide-one (GLP-1) weight loss drugs, drew widespread attention.It was a sign of the market’s interest in a burgeoning class of drugs being created to treat narcolepsy, a disorder that can cause symptoms from daytime drowsiness to vivid hallucinations and a sudden loss of muscle control (known as cataplexy).The drugs being developed by Centessa target orexins, the chemical messengers in the brain that regulate the sleep-wake cycle. Patients with narcolepsy type 1, the more severe kind, lack adequate levels of orexin, scrambling the sleep-wake cycle.Eli Lilly is not running this race alone. This month, the US Food and Drug Administration approved Orzeyful, an oral orexin receptor for narcolepsy treatment developed by Japanese company Takeda. The medication has also been approved in China and Japan.Narcolepsy affects about one in every 2000 people globally.Getty ImagesIrish company Alkermes is developing a similar drug. A clinical trial into its drug, alixorexton, conducted by the Sydney-based Woolcock Institute of Medical Research found that it delivered “statistically significant, clinically meaningful improvements” in patient outcomes.Professor Nathaniel Marshall, a Woolcock Institute researcher and sleep epidemiologist at Macquarie University, said these drugs were having an “astonishing” clinical effect.“If you’re on these drugs, you don’t have type 1 narcolepsy any more. It’s completely replacing the thing that’s causing the condition,” he said.Narcolepsy, which affects about one in every 2000 people globally, is relatively rare. But the drugs being developed to treat the disorder could have far broader impact. Even merely selling a superior drug to treat narcolepsy alone could unlock a larger market, worth as much as $US6 billion annually, according to pharmaceutical intelligence company Norstella.Medications such as Ozempic are used by 2 per cent of the Australian population, mainly for weight loss.Getty ImagesThese drugs are the latest form of synthetically developed peptides – strings of naturally occurring amino acids which tell cells in the body how to behave – whose rise has transformed modern medicine.The best known peptides, GLP-1s such as Ozempic and Mounjaro, began life as treatments for diabetes, before their popular adoption to treat weight loss. They are now used by 2 per cent of the Australian population and are key to the success of companies like Eli Lilly and Ozempic-manufacturer Novo Nordisk.Some in the industry believe that Eli Lilly’s Centessa purchase is a bet on narcolepsy drugs making the same jump – from treatments for a rare neurological disease, to medications used to improve focus, maximise productivity, and turn users into human machines that can function without sleep.In tech circles, where use of grey market peptides to improve workouts, skin health and sex drive has become increasingly popular, orexins are gathering interest.“Lilly may have bought a very good treatment for narcolepsy, or, perhaps, the first half of the largest human-enhancement drug ever made,” wrote Max Marchione, the Australian-born co-founder of $300 million San Francisco healthcare start-up Superpower, in a recent article posted on X.“GLP-1s went from diabetes drugs to miracle drugs in a few years. It’s not crazy to think orexin drugs could be next.”Marchione is not a doctor or medical researcher. His company, which sells access to peptides, stands to benefit from the hype around new medical treatments.Marshall, the Woolcock Institute researcher, said that while there was some chatter about the use of orexins for gambling addictions and alcoholism, the current side effect profile of the drugs didn’t really point at them being useful for getting repurposed.Dr Toby Passioura, co-founder and chief scientific officer at biotechnology start-up Insamo, said the size of Eli Lilly’s acquisition indicated the company was thinking bigger than narcolepsy.“They’re probably also hoping that like Ozempic, lots of people start taking it because they think it makes them smarter or something. The jury is well and truly out on whether that is well and truly going to happen,” he said.But it could all just be a case of the company hedging its bets. “A lot of drug development is fundamentally speculative,” Passioura said.The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.Kishor Napier-Raman is a senior business writer for The Sydney Morning Herald and The Age. Previously he worked as a CBD columnist and reporter in the federal parliamentary press gallery.Connect via X or email.From our partners