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Wall Street JournalThe Zacks Analyst Blog Highlights Eli Lilly, Novo Nordisk, PPH, HRTS and THNR
For Immediate Release
Chicago, IL – October 17, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Eli Lilly LLY, Novo Nordisk NVO, VanEck Pharmaceutical ETF PPH, Obesity & Cardiometabolic ETF HRTS and Amplify Weight Loss Drug & Treatment ETF THNR.
Here are highlights from Wednesday’s Analyst Blog:
Inside the Booming Obesity Drug Market: Weight Loss ETFs to Win
In recent years, the pharmaceutical industry has witnessed a remarkable surge in the development of weight loss medications, particularly GLP-1 receptor agonists such as Ozempic and Wegovy. The global obesity rate has nearly tripled since 1975 and is expected to affect over half the population by 2035, per WHO and Goldman Sachs. The global market for anti-obesity medications is expected to reach $50 billion by 2030.
As the prevalence of obesity rises, so do related chronic conditions such as diabetes, heart disease and hypertension, creating a massive market for treatments like GLP-1 drugs. Pioneering GLP-1 treatments, such as Ozempic, Wegovy and Zepbound, are now at the forefront of medical advancements in weight management.
Two companies — Eli Lilly and Novo Nordisk — dominate the weight-loss drug market and their stocks have surged in the recent past due to soaring demand for their products. There are a few other ways to play this market. Exchange-traded funds (ETFs) are the best ways to access this evolving market.
VanEck Pharmaceutical ETF, Obesity & Cardiometabolic ETF and Amplify Weight Loss Drug & Treatment ETF are the ETFs to play this emerging market.
What Are GLP-1 Receptor Agonists?
GLP-1 medications, initially used to treat diabetes, were later discovered to suppress appetite and lead to considerable weight loss. Recent studies suggest that GLP-1 drugs may also slow the progression of Parkinson's symptoms in humans and lower the risk of heart attack, stroke and cardiovascular death by approximately 20%. GLP-1 (Glucagon-Like Peptide-1) receptor agonists, including semaglutide, are marketed under names like Ozempic and Wegovy.
Ozempic and Wegovy: Market Leaders
Novo Nordisk's Ozempic and Wegovy are at the forefront of this market, particularly in addressing the obesity epidemic. Initially approved for Type 2 diabetes, Ozempic quickly gained off-label popularity for its significant weight loss effects. Wegovy, also developed by Novo Nordisk, is specifically designed for weight loss and received FDA approval for this purpose.
How Crowded Is the Weight Loss Drug Market?
Experts predict that GLP-1 drugs could become blockbuster products with multi-billion-dollar sales potential. Eli Lilly and Novo Nordisk, too, could face stiff competition. Danish biotech Zealand Pharma is targeting the "next generation" of weight loss drugs, as quoted on CNBC.
CEO Adam Steensberg indicated early-stage trial results of its GLP-1 treatment in an interview with CNBC, but said that it is the company's separate obesity drug candidate — Petrelintide, a long-acting amylin analog — that could set it apart in the weight-loss drug segment.
Note that Amylin mimics a different hunger-regulating hormone. As a result, Petrelintide could prove to be an alternative for users who are intolerant of GLP-1s. Plus, last month, Zealand Pharma announced positive top-line results from a phase 1b trial of its weight loss drug, a GLP-1/GLP-2 receptor dual agonist called Dapiglutide.
San Diego-based Viking Therapeutics emerged as a competitorin the weight loss drug market in February after revealing promising data from a mid-stage trial of experimental drug VK2735, which suggested it rivaled—and outperformed—Novo and Lilly drugs when given as a weekly injection. In March, the company disclosed plans to test an oral tablet version after a small stage trial indicated weight loss as high as 3.3%, as quoted on Forbes.
The Forbes article went on to point out that Terns Pharmaceuticals is developing an oral weight loss drug targeting the GLP-1 hormone and expects to release 28-day data on weight loss from an early-stage trial in the second half of 2024.
San Francisco startup Structure Therapeutics is also developing an oral, once-daily GLP-1 drugnamed GSBR-1290. The drug topped Wall Street's expectations in June when a mid-stage study revealed an average weight loss of around 6%, and the company announced plans to start another mid-stage trial toward the end of this year, per Forbes.
Biotech giant Amgen scrapped plans for an experimental weight loss pill in May but is still looking for a share of the marketwith MariTide, a monthly injection that is taken less frequently than popular weekly treatments from Lilly and Novo and notably appears to help some patients maintain weight loss, per a Forbes article.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Novo Nordisk A/S (NVO): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
VanEck Pharmaceutical ETF (PPH): ETF Research Reports
Tema GLP-1, Obesity & Cardiometabolic ETF (HRTS): ETF Research Reports
Amplify Weight Loss Drug & Treatment ETF (THNR): ETF Research Reports