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One of the biggest movements in the pharmaceutical industry right now is developing medications for weight loss. Glucagon-like peptide-1 (GLP-1) agonists such as Ozempic, Wegovy, Rybelsus, Saxenda, Mounjaro, and Zepbound are transforming how diabetes and obesity are treated.

What's amazing is that all of the medications listed above are manufactured by just two companies: Novo Nordisk (NYSE: NVO) and Eli Lilly (NYSE: LLY) .

However, a small clinical-stage biopharmaceutical company called Altimmune (NASDAQ: ALT) is developing a GLP-1 drug that has a major differentiator from those the current market offers. So far, Altimmune's testing for its obesity treatment, pemvidutide, has shown some promising results.

Let's explore why pemvidutide could be such a groundbreaking treatment for weight loss, and assess why larger pharmaceutical giants may pounce at the opportunity to acquire Altimmune as the market heats up.

What makes pemvidutide different?

Losing weight is a double-edged sword. On the one hand, proper dieting and regular exercise can play a big role in the weight loss journey, while improving overall fitness.

On the other, people who lose weight can also unintentionally shed muscle mass . This can lead to a number of serious health issues, including lower energy levels and weaker bone strength, and can even impact mobility.

While Ozempic, Mounjaro, and their sibling medications have all demonstrated that they can help people lose weight, these medications do not currently mitigate the risks of reduced muscle mass.

Pemvidutide is different because it's a GLP-1 drug focused on both losing weight and maintaining muscle mass.

According to the company's Momentum phase 2 trial, obesity patients experienced a 15.6% reduction in weight on average when taking a 2.4 milligram dose of pemvidutide. And only about 22% of this weight loss was attributable to lean mass, while 78% was due to fat.

Altimmune's phase 2 trial successfully demonstrated that pemvidutide can help achieve meaningful weight loss while simultaneously maintaining healthy muscle mass in most patients tested.

Why Novo Nordisk might be interested

In addition to treating obesity, pemvidutide is also being tested to treat metabolic dysfunction-associated steatohepatitis (MASH). MASH is a serious health condition that can result in damage to the liver as well as cardiovascular complications. According to its research and development pipeline, Novo Nordisk has several studies in various stages looking to treat MASH. In fact, one of the studies even features semaglutide -- the main compound in Ozempic and Wegovy.

Earlier this year, the Food and Drug Administration (FDA) granted Wegovy an expanded indication to treat obesity patients who are also at risk of heart disease. There seems to be a lot of overlap between Novo Nordisk's entrance into the cardiovascular market, the company's MASH testing, and the prospects of pemvidutide.

Moreover, Novo Nordisk has already made a splashy acquisition in the cardiovascular space. Earlier this year it acquired Cardior Pharmaceuticals for over $1 billion. Altimmune could be a nice complement to this deal as Novo Nordisk looks to penetrate the crossroads of GLP-1 treatments and the cardiovascular market.

Why Eli Lilly might be interested

For now, Eli Lilly is Novo Nordisk's primary competitor in the weight loss space. But the latter company has a considerable lead over its rival; according to Novo Nordisk's own estimates, it has a 55% share of the global GLP-1 market.

While Lilly's Mounjaro and Zepbound are proving to be monumentally successful, Novo Nordisk's market share underscores its dominance in treating diabetes and managing chronic weight issues. Pemvidutide's differentiator of maintaining muscle mass could help Eli Lilly broaden its reach, and acquire patients who otherwise may have opted for Ozempic or Wegovy.

So I think that if Lilly wants to really start gaining some ground on its primary rival in the space, acquiring Altimmune could be of interest.

Some things to consider

There are a couple of caveats about Altimmune's acquisition prospects.

First, Altimmune is still enrolling patients for a phase 2b pemvidutide study for MASH, and phase 3 trials for treating obesity are in very early discussions. While pemvidutide has the potential to be a multiplatform blockbuster drug, it could be years away from large-scale commercialization.

An acquisition could be a dicey move if pemvidutide experiences a setback or never receives FDA approval. In that case, an acquirer would essentially be gaining only Altimmune's intellectual property (IP).

Second, Eli Lilly may not be interested in Altimmune at all. While the weight loss space is currently fueling much of the larger company's growth, Lilly is a pretty diversified operation overall -- it has medications for plaque psoriasis, psoriatic arthritis, and even cancer. Also, it just received FDA approval for donanemab, providing a path to enter the highly fragmented Alzheimer's market.

Given the progress pemvidutide has made so far, and its overlap with efforts by Eli Lilly and Novo Nordisk, I do think there's a good chance that Altimmune will be acquired.

However, it's important to note that this is my personal outlook, and it's not prudent to buy stock based only on speculation that a company could get acquired. If you don't think Altimmune can produce years' worth of gains, a one-time windfall isn't worth the risk -- and you might be better off buying Novo Nordisk or Eli Lilly.

Before you buy stock in Altimmune, consider this: