Yeah, Artificial Intelligence is cool and could be the mega investing trend over the next few years, BUT…you know what may be more fascinating? GLP-1 drugs
GLP-1 drugs have more familiar names – Ozempic (approved for diabetes), Wegovy (the weight loss approved version of Ozempic), Mounjaro (treats diabetes, soon to be approved weight loss drug) – and are increasingly becoming a global craze. The origin of these drugs came from a treatment of diabetes and an extension of drug companies and patients realizing that they had weight loss benefits.
Here’s a great video explainer of the science behind GLP-1 drugs via WSJ (Sorry if it is paywalled).
Can you imagine the effects on our lifestyles, economy, and markets if obesity is solved?? The obesity epidemic costs the US about $200B per year through health-related problems, and any effort to arrest or bend the concerning trend will be met with a gigantic market opportunity. Just think of some of the 1st and 2nd order effects if these drugs become widespread adopted – what happens to fast food companies? Companies involved in sleep apnea? Diabetes device makers? The dieting industry? A quick search of “GLP-1” mentions on public company conference shows about 1,000 mentions, and only half from pharma companies. (Fun side note: you can do similar search on “AI” among companies and see that Kroger mentioned it numerous times. So, companies like saying “buzzy” things!)
[Good podcast on how these drugs could change everything]
Some interesting cocktail party talk/kids birthday party small talk/sitting in back of Uber fill the awkward silence talk/etc.:
- Novo Nordisk is the manufacturer of Ozempic and Wegovy and these drugs’ recent success has led the Danish-based company to grow their market cap bigger than the country’s GDP.
- Some estimates for peak annual sales of Mounjaro are up to $25B (with a “B”!) per year. Compare that to the peak sales of Viagra that hit close to $2B/year a decade ago. This is some stiff competition!
After hearing about these GLP-1 drugs, you may be wondering about investment opportunities. Like anything related to trend investing, it’s hard to (1) time it well and (2) pick the winner(s). Eli Lilly, Novo Nordisk (yay international investing!) are the two enjoying the most success now. But will the ‘fast followers’ make a splash? (see below for who’s at what stage in the obesity pharma race)
Enjoy the weekend knowing you can eat anything you want now!
