Investors Are Betting on Obesity Drugs That Go Beyond Appetite

GLP-1 drugs have helped millions of Americans lose significant weight, but they haven't worked well for everyone. Some people lose little weight on them while others struggle with nausea and other gastrointestinal side effects, or lose lean muscle along with fat. In a November 2025 KFF poll, 13 percent of people who had taken GLP-1s said they stopped because of side effects, close to the 14 percent who stopped because of cost. Those shortcomings have drawn investor money to a growing group of biotechs developing obesity drugs that target fat more precisely, spare muscle, or help people keep weight off after they stop GLP-1s. Most expect their drugs to be taken alongside GLP-1s, a bet that Eli Lilly, maker of Zepbound and Mounjaro, has backed.

In September, Lilly participated in an oversubscribed $70 million Series B for Moonwalk Biosciences, a San Francisco-area biotech developing RNA interference (RNAi) therapies for obesity and metabolic disorders. Alpha Wave Global and YK Bioventures co-led the round, which will carry Moonwalk's lead candidate, MW101, toward first-in-human studies expected in late 2027.

"They're not perfect," Alex Aravanis, Moonwalk's CEO and co-founder, said of GLP-1s. Those drugs work mainly by suppressing appetite so people eat less. Moonwalk's therapies are designed to act on fat tissue itself.

One Investor Case for Targeting Fat

Gary Yeung, founder and managing partner at YK Bioventures, has spent 15 years in drug development. He said Moonwalk appealed to the firm because it's pursuing a different approach to problems that existing obesity drugs haven't fully solved.

"When you lose weight, you don't want your body to be weakened," Yeung said, emphasizing that future obesity treatments should preserve strength as well as reduce fat.

GLP-1s suppress appetite across the board, he said.

"You need to have better efficacy, more targeted treatment, so you induce less side effects," he added.

Scientific promise alone isn't enough to win his confidence, though. Before investing, YK Bioventures looks for peer-reviewed research and laboratory and animal data suggesting a new mechanism could translate into a treatment for patients, Yeung said. In Moonwalk's case, that evidence came from lab and animal studies.

The Science Behind Moonwalk’s Approach

Moonwalk identifies genes linked to obesity through human genetics and epigenetic studies, then develops RNAi medicines to quiet those genes. The therapies aim to shift fat cells toward using and releasing stored energy, "tipping the balance a bit more towards the usage and liberation of the fats," Aravanis said.

That focus on the fat cell sets Moonwalk apart from some of its closest competitors. Wave Life Sciences, another RNAi developer whose obesity drug is already in human trials, goes after a target in the liver.

In preclinical studies, Moonwalk says its therapies reduced body weight and fat mass in rodents while preserving lean mass. Preliminary results in non-human primates show similar trends. The animals also continued eating normally and showed no signs of gastrointestinal distress, Aravanis said.

Those findings are encouraging, but animal results don't reliably predict how a drug performs in people. Moonwalk still needs to establish safety, dosing, and efficacy in clinical trials.

The company is also pursuing less frequent dosing than the weekly injections used by many current GLP-1 medicines.

"We see really good durability of the inhibitory RNAi in the primate models where a single injection can easily last three months, and we think it may last six months or more," Aravanis said.

One of the biggest obstacles Moonwalk still faces is ensuring its RNAi therapies reach human fat tissue selectively. Yeung is clear-eyed about that.

"Targets could be a risk, the delivery could be a risk, and then the translation [from animals to humans] could be a risk," he said. "But in totality, for all the in vitro data and animal data we've seen, we have a strong conviction this will work."

New Drugs Built to Work Alongside GLP-1s

Moonwalk isn't necessarily betting that its medicines will replace GLP-1s. Aravanis said he expects those drugs to remain important for years to come.

"I don't think it's an either or," he said. Instead, he sees a future in which medicines with different mechanisms could be used together, potentially allowing some patients to benefit from a combination of treatments.

Moonwalk is one of several companies pursuing that idea, and some are already testing RNAi drugs in people. In January, Arrowhead Pharmaceuticals reported that a single dose of ARO-ALK7, which targets a receptor in fat cells, cut visceral fat by 14.1 percent compared with placebo at eight weeks in an early trial. Wave's WVE-007 reduced fat without muscle loss, but its March update showed less weight loss than investors expected, and the company's stock fell by about half in a day. Arrowhead is testing its drugs in combination with tirzepatide, Lilly's GLP-1, and Wave pitches WVE-007 as a possible maintenance option for people coming off GLP-1s.

Other companies are taking on a different piece of the problem: keeping weight off once people stop GLP-1s. Enveda Biosciences, a Boulder-based biotech that raised $311 million in September, is developing ENV-308, a daily pill designed to mimic Lac-Phe, a molecule released during intense exercise.

In August, Enveda reported Phase 1 results in 88 volunteers without obesity. The drug was well tolerated and reduced levels of leptin, a hormone involved in appetite regulation. The trial assessed safety. Whether ENV-308 helps people keep weight off is a question for Phase 2.

Nadeem Sarwar, who leads metabolic strategy at Enveda, said the industry's challenge is to develop medicines that can reach far more people than today's treatments.

"What can we make that is truly tolerable and scalable?" he said, arguing that obesity, a disease affecting more than 1 billion people worldwide, requires treatments that can work at that scale.

He cautioned against creating increasingly specialized treatments that remain out of reach for much of the population.

"There's a lot left to do," he said, describing opportunities to develop treatments for people before they become patients, during treatment, and after they stop taking a medicine.

"GLP-1s have been transformative. They've opened the door. We can't stop there," Sarwar said.