Deloitte: GLP-1 Jabs are Displacing Oncology with Obesity

Deloitte has released the 16th edition of its ‘Measuring the Return from Pharmaceutical Innovation’ report.

Overall, pharmaceutical research and development (R&D) returns improved for the third consecutive year.

Deloitte’s data shows that much of this growth is being driven by a small number of high-value obesity treatments, particularly glucagon-like peptide receptor agonists (GLP-1s) and gastric inhibitory polypeptide-based drugs (GIPs).

What are GLP-1s and GIPs?

GLP-1 agonists are a class of medication that can help lower blood sugar levels in people with type 2 diabetes, according to Diabetes UK.

The medication works by increasing incretin levels, hormones that help the body produce more insulin when needed, thereby lowering blood sugar levels.

GLP drugs slow down how quickly food is digested and reduce appetite, which is why their use for weight loss purposes has increased.

According to Diabetes UK, Adults over 18 years may be prescribed a GLP-1 agonist to manage overweight and obesity alongside a reduced-calorie diet and physical activity.  

The GIP hormone was originally discovered as a peptide that could inhibit gastric acid secretion and protect the small intestine from acid damage, says Juniper, an online telehealth platform.

Juniper states: “GIP is an incretin hormone released by K cells in your small intestine, which stimulates insulin secretion after you eat food.”

GIP and GLP-1 are both incretin hormones released by the gut after eating. 

They help digestion and trigger insulin release to control blood sugar; however, they work differently and offer different benefits in the body.

Research suggests GLP-1 is generally more effective than GIP for managing type 2 diabetes. 

While both hormones stimulate insulin secretion, GIP lacks the “late phase” insulin response, making it less effective over time than GLP-1, according to Juniper.

GLP and GIP market growth

According to Deloitte, projected internal rates of return (IRR) on late-stage pipeline assets increased to 7% in 2025, representing a 1.1 % point improvement from the previous year.

Much of this growth was linked to companies advancing GLP-1 and GIP assets into late-stage development, particularly in obesity and diabetes treatment markets. 

Average forecast peak sales per asset also climbed from US$510m in 2024 to US$598m in 2025, further boosting overall returns. 

However, Deloitte’s findings show that these gains are not evenly spread across the industry and are instead concentrated within a small number of highly valuable programmes. 

When GLP-1 and GIP assets are excluded from the analysis, the industry’s underlying R&D productivity appears significantly weaker, with returns dropping to 2.9% from 3.8% in 2024.

Deloitte notes that this imbalance highlights the growing dependence on a limited group of blockbuster therapies to sustain pharmaceutical innovation performance.

“The outcomes from pharma innovation show up in two places: returns for the business and real improvements in patient outcomes,” says Brett Davis, US Chief Innovation Officer at Deloitte, on LinkedIn.

“The rise of GLP-1 therapies and the continued pace of oncology research signals how quickly the innovation frontier is moving.”

A concentrated pharmaceutical portfolio

Deloitte’s report also found that pharmaceutical portfolio value is becoming increasingly concentrated in fewer, larger assets. 

While the total number of blockbuster assets projected to generate more than US$1bn in peak sales slightly declined in 2025, the number of mega-blockbusters expected to exceed US$10bn in sales increased from six to eight. 

These high-performing assets now account for a substantial share of projected pipeline value, with only 9% of late-stage asset indications expected to generate approximately 70% of total risk-adjusted peak sales. 

Deloitte warns that this concentration creates a high-stakes environment where a single programme failure, regulatory setback or market disruption could significantly impact overall returns. 

The report also revealed that more than half of all pipeline asset indications are forecast to achieve peak sales below US$250m, placing additional pressure on companies to justify investment in lower-value programmes. 

“GLP-1s are rewriting the rules of pharma R&D. That’s not entirely good news,” says Yannis Dracoulis, Partner, Forensic, Financial Crime & Disputes at Deloitte, on LinkedIn.

“For the first time in 16 years of analysis, obesity has dethroned oncology as the largest value driver in pharma's late-stage pipeline.”

Deloitte stresses that organisations must carefully evaluate whether these smaller assets address unmet clinical needs or offer meaningful differentiation within competitive markets.

Obesity overtakes oncology

For the first time in Deloitte’s 16 years of analysis, obesity has surpassed oncology as the largest contributor to late-stage pharmaceutical pipeline value. 

Obesity-related assets, driven primarily by GLP-1 and GIP therapies, now account for approximately 25% of total projected pipeline sales, compared with just 1% in 2022. 

Deloitte describes this as a major shift that increases the industry’s exposure to therapy-area-specific risks, including pricing pressure, market access challenges, safety concerns and manufacturing constraints within the obesity treatment market. 

At the same time, the cost of developing a drug from discovery to launch has risen sharply to US$2.67bn in 2025, up from US$2.23bn in 2024.

Deloitte states that rising R&D expenditure combined with shrinking late-stage pipelines is increasing pressure on companies to deliver higher-value assets. 

To sustain long-term productivity, Deloitte recommends that pharmaceutical leaders improve the integration of strategy and capital allocation, embed competitive market analysis into development decisions, and move beyond isolated AI pilot programmes toward fully integrated, end-to-end operational transformation.