By Josh Nathan-Kazis

An experimental drug from the biotech Arrowhead Pharmaceuticals helped patients on Eli Lilly's Zepbound lose even more weight in a clinical trial, but big questions remain about how much patients will care.

Arrowhead said that patients on its drug ARO-INHBE and Zepbound lost an average of 9.4% of their weight after 16 weeks, compared with a 4.8% weight loss in patients on Zepbound alone.

The early-stage Phase 1/2 trial tested the drug in obese patients with type 2 diabetes, who generally lose less weight on medicines like Zepbound than patients who do not have the condition.

Arrowhead shares were up 17.6% Tuesday, after falling 5.7% Monday amid a broader pullback in biotech stocks.

The bigger winner on Tuesday was Wave Life Sciences, an Arrowhead competitor that in December announced promising early data on a one-time treatment called WVE-007. Wave shares were up 23.7% Tuesday as investors took the Arrowhead data as a sign that Wave's drug will work in similar future trials.

It's all part of the next phase of the obesity market, created over the past few years by the arrival of Novo Nordisk's Wegovy and Lilly's Zepbound. Together, the two drugs have created a massive new market for obesity treatments, with sales of Zepbound alone expected to have surpassed $13 billion in 2025, according to FactSet.

Now, as the weight loss market matures, new medicines are seeking their own segments of the growing pot. Novo's oral Wegovy, launched Monday, will target patients seeking moderate weight loss in pill form, as will Lilly's oral drug orforglipron, expected to launch later this year.

Both Arrowhead and Wave are working on targeted weight loss treatments designed to reduce fat storage while preserving muscle tissue. The idea is that, for some patients, the new medicines could improve the effects of the weight loss drugs like Wegovy and Zepbound, which don't discriminate between fat and muscle.

A statement from Arrowhead on Monday said that patients on ARO-INHBE and Zepbound together had a 23.3% reduction in visceral fat, or fat stored around a person's organs. Patients on Zepbound alone had a 7.4% reduction in visceral fat.

The company also tested another drug, ARO-ALK7, in a separate early-stage Phase 1/2a trial, which drove a 14.1% reduction in visceral fat after eight weeks.

Both drugs work on a particular biological pathway related to fat storage. Arrowhead said that the new data suggests that such drugs may be able to improve on the weaknesses of the existing weight loss medicines.

"Shortcomings around loss of lean mass, tolerability related to GI effects, reduced response in patients with diabetes, and disproportional fat mass gain after cessation of therapy remains a challenge for many patients," said Arrowhead's chief medical officer and head of R&D, Dr. James Hamilton.

The question is whether the differences the new drugs deliver will be significant enough for patients to care. Pricing could be a challenge: Zepbound and Wegovy are both expensive enough on their own, and taking an Arrowhead drug on top of those prescriptions would notionally mean a significant add-on to that price.

Wave's WVE-007 works the same way as Arrowhead's ARO-INHBE, and analysts said Tuesday that the good results for ARO-INHBE were good news for WVE-007. "Overall, we think these results read-through positively to WVE, where we think the early results still suggest WVE-007 can be potentially best-in-class," Leerink Partners analyst Joseph Schwartz wrote Tuesday.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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January 06, 2026 11:26 ET (16:26 GMT)

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