Weight loss drugs are set to remain well in focus of investors this year, as the rollout of such treatment looks to even affect the food industry, Liberum analysts say.
Following Novo Nordisk (NYSE:NVO)’s announcement last August that such drugs reduce risk of stroke and heart attack in overweight people, Liberum said hype was set to continue for the treatments through 2024.
This is as companies join Novo and other market leader Eli Lilly and Co (NYSE:LLY) and deploy potentially cheaper alternatives to their drugs, which cost as much as US$1,400 monthly in the US or £199 in the UK, according to Liberum.
Such drugs work by mimicking a hormone called GLP-1, which is released after eating to reduce appetites, for instance.
Liberum noted that the food industry could feel the effects of such treatments hitting shops in the long term as a result, with an estimated 1.9 billion people globally said to qualify for the drugs.
“Pharmaceutical companies that manufacture these drugs or are about to enter this market are the clear winners,” analysts said in a research note.
“Losers, meanwhile, are businesses linked to bariatric surgery and obesity-related health issues.”
These include Fresenius Medical Care (NYSE:FMS), which develops products and services for dialysis, and its parent company Fresenius SE, which owns hospitals.
Emerging players include AstraZeneca PLC (LSE:AZN) and Zealand Pharma, with the latter targeting the market through its survodutide drug for overweight people with or without related diseases.
AstraZeneca’s deal with Eccogene to commercialise the latter’s small GLP-1 molecule for obesity and diabetes treatment could provide long-term share price gains meanwhile, the bank added.