Ozempic and Wegovy (semaglutide for diabetes and weight loss, respectively) are popular weight-loss drugs that have taken the world by storm. Indeed, the craze is showing no signs of slowing down as more supply of GLP-1 receptor agonists comes online to meet blistering demand. Though demand is showing no signs of slowing, there’s already a great deal of competition going after a market that could grow to $100 billion by 2035, according to some analysts.
Indeed, there’s some serious growth to be had for the companies innovating on the front of obesity drugs. And while Ozempic is synonymous with GLP-1 drugs, growth investors should be ready to spread their bets as it may not be one of the pioneers that ultimately dominate the market 10 years from now. The drug that leads to the greatest fat loss, the least amount of lean muscle loss, and the fewest side effects is likely to be one of the biggest winners in the weight-loss drug race.
In this piece, we’ll profile three innovators who are already taking advantage of the weight-loss drug boom.
Novo Nordisk (NVO)
There’s no better way to bet on Ozempic specifically than the Ozempic maker itself Novo Nordisk (NYSE:NVO). Sure, Novo isn’t the only game in town anymore for investors with an insatiable appetite for weight-loss drug innovators.
With NVO stock at a fresh new all-time high of over $141 per share, the valuation is getting just a tad stretched. At writing, shares of the Ozempic and Wegovy-maker are trading at 48.89 times trailing price-to-earnings (P/E) after surging close to 39% year-to-date.
With the early lead in the weight-loss drug scene, it’s Novo’s market to lose. Fortunately, the company is doing a great job of overcoming supply-side constraints by investing to meet lofty demand. Additionally, as we learn more about the kidney health benefits, it seems like demand could stand to gain further.
The only question is, will Novo be able to feed the masses with enough Ozempic and Wegovy until they’re satiated?
Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is another leading weight-loss drug stock that could make for a great long-term bet. Like Novo, Eli Lilly is firing on all cylinders to do its part to meet sky-high demand for weight-loss drugs. There’s a lot more to love about Lilly than just its weight-loss drug, Mounjaro, and its potential successors.
Undoubtedly, Lilly is far from being a weight-loss drug pure-play, with so many other fantastic drugs that treat a range of diseases. LLY stock seems most moved by developments in the weight-loss drug scene. However, I view the Alzheimer’s drug Donanemab as even more profound an innovation than Mounjaro. Recently, Donanemab was recommended by FDA advisors, a bold move that could be a precursor to its eventual approval.
You’re getting two incredible innovations from Lilly. And with that, the stock deserves every bit of its premium price tag. LLY stock is for real, and I think there’s still more room to run.
Amgen (AMGN)
Amgen (NASDAQ:AMGN) is another fantastic biotech innovator that could have something big in store for the weight-loss drug market. The biotech innovator may be a latecomer. But with such explosive growth prospects in the GLP-1 drug scene, it appears that showing up late to the party will prove far better than not showing up at all. The only question is will Amgen’s offering make it through remaining clinical trials.
MariTide is in the middle of clinical trials, but early signs show considerable promise. The significant differentiating factor may be the drug’s longer-lasting effect. A major problem with Ozempic is the pounds tend to be regained when getting off the drug. With Amgen’s offering, perhaps that problem has been solved.
Though promising, MariTide still needs to keep demonstrating its safety and effectiveness. There have been reports of gastrointestinal side effects, which can be pretty common for certain GLP-1s.
Additionally, Amgen has a lot more going for it other than obesity drugs, with a very robust and diversified pipeline that could yield meaningful cash cows, like Uplinza for immune-mediated multi-organ disorder, which recently hit a major milestone in its phase-three trial.
On the date of publication, Joey Frenette did not hold (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.
