Epitomee Medical (TASE: EPIT), chaired by serial biomed entrepreneur Shimon Eckhouse, has announced the receipt of US Federal Drug Administration (FDA) approval for the sale of its weight management pill in the US. The pill expands in the stomach, giving a sense of satiety.
Following the report, Epitomee’s share price shot up by 152% yesterday, and is up by a further 27% so far today. The company’s market cap at yesterday’s close was NIS 232 million, still 75% below its valuation in its flotation on the Tel Aviv Stock Exchange in December 2021.
The FDA approval was fairly predictable. The real challenge will be in marketing the product (the company has yet to record sales). Epitomee was to have entered the slimming market with food giant Nestlé, but the latter withdrew from the marketing agreement between the companies at the end of 2023, which is what led to the drop in Epitomee’s share price. Nestlé said that although results of clinical trials of the pill indicated a statistically significant, and substantial, weight loss from its use, they were not sufficient for it to stand behind marketing of the product.
The background to Nestlé’s decision was significant changes that had taken place in the market for obesity prevention products since Epitomee was founded, and even since its flotation. Eli Lilly and Novo Nordisk brought weight-loss inducing drugs to the market that were much more effective than anything seen before them, and more effective than Epitomee’s pill.
In Epitomee’s trial, 27% of patients lost at least 10% of their body weight, and more than 10% lost at least 15%. Eli Lilly’s drug, at high dosage, led to a weight loss of 20% or more for over half of the participants in its trial.
Epitomee has said in the past that its product is aimed at people with a low to medium degree of obesity, and those who fear the side effects of weight-loss drugs. Besides this, Epitomee CEO Dan Hashimshony stressed, talking to "Globes", that Epitomee’s pill is swallowed, whereas other treatments are administered by injection.
"Our intention now is to sign a number of agreements with distributors," Hashimshony said. "In the US, we shall work with a single distributor for each state, and in Europe with strong local distributors in each country, even if they are not well known internationally. The agreements will be classic distribution agreements, and we will announce them gradually from today until the product launch in the third quarter of 2025, and even after that."
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At the end of June, Epitomee had liquid balances of $29 million, after accumulating losses of $65 million since it was founded. In the first half of this year, the company used $4.3 million for its regular operations, and, according to Hashimshony, it has sufficient cash to complete its production facility and to launch the product.
Published by Globes, Israel business news – en.globes.co.il – on September 16, 2024.
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