Investors are well aware of the explosive growth potential in weight loss drug stocks. That growth began last year with Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO). GLP-1 receptor agonist drugs commercialized by those firms have started a revolution in weight loss.
The early stages of that revolution caused the share prices of those already well established firms to double. Forecasts suggest that there is plenty of growth remaining in each. Thus, there is plenty of logic behind the decision to invest in Eli Lilly and Novo Nordisk at this point. However, this article will focus on neither of those respective firms.
Instead, we will dive into weight loss drug news related to seven other companies, each of which has explosive potential.
Weight Loss Drug Stocks: Amgen (AMGN)
Amgen (NASDAQ:AMGN) stock is sending ripples of fear across the pharmaceutical sector. Well, at least for those invested in Eli Lilly and Novo Nordisk.
The reason Amgen is rising is that initial data related to its weight loss injection is proving positive. It is one of many competitors in the still nascent weight loss drug category. All of that competition is proving costly to Eli Lilly and Novo Nordisk, which have fallen as a result.
Amgen is planning to release initial data on its weight loss injection drug, MariTide, in late 2024. The enthusiasm around the drug stems from a few factors. One, patient dropout has been very low. Additionally, injections are only required monthly and done with a handheld injector. That compares very favorably with weekly injections of weight loss drugs from Eli Lilly and Novo Nordisk.
Amgen has begun ramping up manufacturing in anticipation of successful development of MariTide. Readers will remember that Eli Lilly and Novo Nordisk faced serious hurdles due to a lack of manufacturing capacity that cost them sales.
Pfizer (PFE)
Pfizer (NYSE:PFE) Stock continues to suffer a post-pandemic hangover. I continue to believe that it has massive potential because it is so discounted and have continually recommended it for its dividend at the moment. I also believe that the company will find new revenue streams and ultimately return to its former growth.
Consider Pfizer for its current dividend and the belief that it will find strong revenue streams again. Interestingly, weight loss drugs are one of the greatest potential streams of future income for Pfizer.
Pfizer is also differentiating its GLP-1 drugs. The company is leveraging its experience developing oral small molecule drugs. Orally administered weight loss drugs are one of the biggest opportunities in weight loss at the moment. It should come as no surprise that patients prefer tablets over injections. If Pfizer is among the first to commercialize a weight loss tablet, the sky’s the limit.
The company’s lead candidate drug is now in stage 2B trials. Pfizer is working on formulating a once daily tablet delivery. The company has run into roadblocks in testing but has as good a chance as any at commercialization.
Weight Loss Drug Stocks: Viking Therapeutics (VKTX)
Viking Therapeutics (NASDAQ:VKTX) is a lesser-known pharmaceutical stock but one of the primary firms to watch for the potential of its weight loss drug.
Phase 2 trials demonstrated that its weight loss drug led to up to 13.1% placebo-adjusted weight loss. That’s the primary reason to be highly interested in Viking Therapeutics. Those weight loss totals exceed those of drugs from both Eli Lilly and Novo Nordisk.
The potential of Viking Therapeutics’ weight loss drugs makes it a takeover target. Rumors have continued to swirl and the company may already have been approached by other companies.
That puts the company and its stock in a very good position. If it is taken over it will require a large premium that will reward shareholders. If not, and the company successfully commercializes a weight loss drug, it will also rise substantially. In short, there are multiple reasons to invest in Viking Therapeutics currently.
Structure Therapeutics (GPCR)
Structure Therapeutics (NASDAQ:GPCR) stock represents an up-and-coming firm developing orally administered weight loss drugs. Patients will continue to prefer pills over injections and that is where Structure Therapeutics holds a substantial advantage.
The company is developing weight loss pills that are currently in clinical trials. Each pill is a GLP-1 agonist, utilizing the same mechanism as do Ozempic and Mounjaro.
However, Structure Therapeutics is not only notable in that the company is developing orally administered weight loss drugs. It is also addressing another aspect of weight loss drugs that is very important: muscle wasting.
Structure Therapeutics is developing a pill that addresses muscle wasting associated with the administration of GLP-1 agonist drugs. So, not only does the company have multiple weight loss drug pill candidates but also important secondary therapeutics in the weight loss equation.
The point here is that the company has multiple potential revenue streams that reduce its chances of failure, making it highly attractive.
Weight Loss Drug Stocks: Altimmune (ALT)
Altimmune (NASDAQ:ALT), like Structure Therapeutics, is addressing the muscle wasting issue associated with weight loss drugs. That simple but powerful fact positions its stock for explosive growth in the near future.
Patients administered Altimmune’s pemvidutide weight loss drug experienced a 25.5% decrease in lean muscle mass. That’s a substantial improvement when compared with Ozempic and Wegovy. Patients taking those drugs experienced a near 40% decline in lean muscle mass associated with weight loss. A 25% decrease in lean muscle mass is comparable to that associated with weight loss through diet and exercise alone.
Pemvidutide also works to reduce fatty liver deposits and as a hepatitis B treatment. For those reasons, The FDA granted it a fast track designation for the treatment of fatty liver disease. Results of that study will be out in early 2025.
A 48-week trial of the drug as a weight loss therapeutic showed that more than 30% of participants lost 20% of their body mass or more.
AstraZeneca (AZN)
AstraZeneca (NASDAQ:AZN) Struggled to develop its own weight loss drug programs. For that reason, it had been considered something of a laggard amongst weight loss drug stocks. That changed late last year when the company shelled out up to $2 billion for the rights to a weight loss drug program from Chinese firm, Eccogene.
AstraZeneca announced the investment immediately following FDA approval of Eli Lilly drug Zepbound. It failed to progress the development of multiple GLP-1 drugs in house. So, the company decided to partner up with Chinese firm Eccogene. AstraZeneca paid $185 million up front for rights to Develop Eccogene’s ECC5004 drug.
Share prices jumped in recent weeks following AstraZeneca’s strong earnings report. That report showed revenues increased by 19%. Share prices jumped by more than 5% on the news. Meanwhile, the company concurrently increased its dividend by 20 cents on the news.
Overall, AstraZeneca benefits from a large, diversified portfolio of therapeutics that could jump significantly high should its investment in Eccogene pan out positively.
Merck (MRK)
Merck’s (NYSE:MRK) leading weight loss drug candidate is called efinopegdutide. It is another GLP-1 agonist drug with efficacy in weight loss. Investing in Merck represents a more diversified approach to benefiting from the weight loss boom.
Efinopegdutide is being developed as a treatment for Non-Alcoholic Steatohepatitis (NASH). The drug is also noted for its ability to induce substantial weight loss. Merck’s CEO believes that it will be easier to receive reimbursement for weight loss drugs with differentiated efficacy.
Insurance schemes have pushed back on reimbursement for weight loss drugs. Pharmaceutical executives believe that focusing on multiple outcomes is a better strategy. That strategy will raise fewer barriers from insurance companies and should ensure greater coverage of the drugs.
That’s part of the reason Novo Nordisk and Eli Lilly have been touting the varied efficacy of their weight loss drugs. Overall, Merck represents a more conservative approach to investing in weight loss drugs. The company should perform relatively steadily into the future.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
