The pharmaceutical sector is experiencing an unprecedented boom in the development of weight-loss medications, particularly with the emergence of GLP-1 receptor agonists such as Ozempic and Wegovy. According to the World Health Organization (WHO) and Goldman Sachs, the global obesity rate has nearly tripled since 1975 and is projected to impact more than half of the world’s population by 2035. The market for anti-obesity drugs is expected to reach a staggering $50 billion by 2030.
The rise in obesity rates is paralleled by a surge in chronic conditions, including diabetes, heart disease, and hypertension. This trend has paved the way for increased demand for treatments like GLP-1 drugs, which are at the cutting edge of medical innovation in weight management.
Market Leaders: Eli Lilly and Novo Nordisk
Eli Lilly (LLY) and Novo Nordisk (NVO) are the two leading players in the weight-loss drug market, and their stock values have soared in recent months due to the skyrocketing demand for their products. For investors looking to capitalize on this expanding market, exchange-traded funds (ETFs) present a compelling opportunity. Notable ETFs in this space include the VanEck Pharmaceutical ETF (PPH), the Obesity & Cardiometabolic ETF (HRTS), and the Amplify Weight Loss Drug & Treatment ETF (THNR).
Understanding GLP-1 Receptor Agonists
Initially developed for diabetes management, GLP-1 medications were found to effectively suppress appetite and facilitate significant weight loss. Recent research also suggests these drugs may slow the progression of Parkinson’s symptoms and reduce the risk of heart attack, stroke, and cardiovascular mortality by approximately 20%. Semaglutide, a prominent GLP-1 receptor agonist, is marketed under brands like Ozempic and Wegovy.
Ozempic and Wegovy: Leading the Charge
Novo Nordisk’s Ozempic and Wegovy are pioneering treatments in the battle against obesity. Ozempic, originally approved for Type 2 diabetes, quickly gained off-label traction due to its remarkable weight loss benefits. Meanwhile, Wegovy was specifically formulated for weight loss and has received FDA approval for this indication.
A Crowded and Competitive Market
Experts believe GLP-1 drugs have the potential to become blockbuster products, generating multi-billion-dollar revenues. Despite the dominance of Eli Lilly and Novo Nordisk, competition is heating up. Zealand Pharma, a Danish biotech firm, is working on what it describes as the “next generation” of weight loss treatments. CEO Adam Steensberg discussed promising early-stage trial results of their GLP-1 treatment and highlighted their unique obesity candidate, Petrelintide, a long-acting amylin analog that may appeal to those intolerant to GLP-1 medications. Recently, Zealand Pharma announced positive phase 1b trial results for its GLP-1/GLP-2 receptor dual agonist, Dapiglutide.
In February, Viking Therapeutics, based in San Diego, entered the fray after revealing promising mid-stage trial results for its experimental drug VK2735, which showed potential to rival and even outperform existing offerings from Novo Nordisk and Eli Lilly. In March, Viking disclosed plans to develop an oral tablet version after a small study indicated weight loss up to 3.3%.
Moreover, Terns Pharmaceuticals is progressing on an oral weight loss drug targeting the GLP-1 hormone, with 28-day data from an early-stage trial expected in late 2024. San Francisco-based Structure Therapeutics is also in the race with GSBR-1290, an oral, once-daily GLP-1 drug that exceeded expectations in a mid-stage study, showing an average weight loss of around 6%. The company plans to initiate another mid-stage trial by the end of this year.
Amgen’s Strategic Shift
In a notable move, Amgen recently abandoned plans for an experimental weight loss pill but remains committed to capturing market share with MariTide, a monthly injection designed to be administered less frequently than popular weekly treatments from Lilly and Novo Nordisk. Reports suggest that MariTide may help certain patients maintain their weight loss effectively.
As the obesity drug market continues to evolve, investors and companies alike are keenly watching these developments, poised to benefit from the burgeoning demand for effective weight loss treatments.
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