UBS says the market for GLP-1 obesity and diabetes drugs remains structurally strong, with obesity the key driver of growth, in a note backing its positive stance on the sector's key suppliers.
The bank, drawing on a call with its US biotech analyst Michael Yee, put the global market at around $130 billion to $135 billion by 2030.
It forecast roughly 40 million patients on GLP-1 drugs by 2030, up from about 25 million in 2026, with around half coming from the United States alone.
UBS said penetration of the eligible obese population remained relatively low, supporting multi-year volume expansion.
It noted that discontinuation rates were still high, with around half of patients off the drugs after a year, but said falling prices and next-generation therapies should improve persistence over time.
Oral versions are emerging and could account for around 20% of the market long term, though UBS sees them as complementary rather than disruptive given lower efficacy than injectables.
The bank described the market as a duopoly in which Eli Lilly was increasingly the clear leader.
It expects Lilly to reach around 65% market share against about 15% for Novo Nordisk (NYSE:NVO), supported by the superior efficacy of its tirzepatide and a strong pipeline of next-generation assets.
UBS said that after 2030, as generics begin to enter the United States, Novo's behaviour would be a key swing factor for industry pricing.
A central message of the note is that demand is not the limiting factor.
UBS argued that manufacturing capacity and pricing dynamics would instead shape the market, with significant scale-up needed across peptide production, fill and finish, and delivery devices.
It noted that pricing was already trending lower, with cash-pay prices in the United States below $300 a month.
Lower prices should drive volumes but pressure margins and raise barriers for new entrants, the bank said.
UBS came away constructive on market volumes, reinforcing its positive stance on key suppliers to the industry.
It is buy-rated on Swiss contract manufacturer Bachem, where it estimates GLP-1 drugs account for around 50% to 60% of sales.
The bank is also positive on injection-device maker Ypsomed, where it expects exposure to rise towards 30% by the end of the decade, and on peptide manufacturer PolyPeptide, at around 57%.
It cited sustained demand, capacity expansion and rising penetration as underpinning mid-term growth across the three names
