Global Obesity Drug Market to Grow 16x – Top Weight-Loss Stocks to Watch in 2024
Goldman Sachs Says "Obesity Market is Still in its Early Stages" and Projects the Sector to Grow By as Much as 16x to $100 Billion By 2030
With the weight-loss pharma sector poised for exponential future growth, here’s the skinny on the top obesity drug stocks investors should be watching.
It’s no secret that obesity rates have been on the rise globally for some time, rising nearly 200% since 1975.
A reduction in physical activity and poor eating habits combined with genetic factors and chronic diseases such as Diabetes have led the World Health Organization (WHO) to forecast a continuation of rising obesity rates.
If the current trend continues, over 50% of the world’s population is expected to be considered overweight or obese, according to the latest World Obesity Atlas 2023 report. In 2020, 38% of the global population fell into the overweight or obese categories.
According to the WHO, Obesity is currently the fifth-leading risk factor contributing as a primary cause of death worldwide.
The WHO defines the terms “Obesity” and “Overweight” as follows:
“Overweight and obesity are defined as abnormal or excessive fat accumulation that presents a risk to health. In adults, a body mass index (BMI) over 25 is considered overweight, and over 30 is obese. In children aged between 5–19 years, overweight is BMI-for-age greater than 1 standard deviation above the WHO Growth Reference median; and obesity is greater than 2 standard deviations above the WHO Growth Reference median.”
Obesity is not only damaging to an individual’s health, but it also carries with it a significant economic burden in the form of medical expenses and reduced productivity.
In the United States, the Centers for Disease Control and Prevention (CDC) estimated that, in 2019, the medical costs associated with obesity were approximately $173 billion.
Per the World Obesity Atlas, total healthcare and productivity-related costs related to obesity are expected to surpass $4 trillion globally by 2035. $4 trillion would equate to around 3% of the world’s GDP.
Also Read: ELEVAI Labs Posts Record Full Year 2023 and Q4 Earnings
“In the midst of every crisis, lies great opportunity.” – Albert Einstein
The ongoing obesity health crisis has created an enormous market opportunity that has attracted some of the world’s largest healthcare and pharma companies into the weight-loss sector.
With billions of people globally falling into the overweight or obese categories, the market for effective weight-loss drugs is massive and expected to grow exponentially in the coming years.
According to Goldman Sachs research, the global market for obesity drugs reached $6 billion in 2023 and is projected to grow 16x to $100 billion by 2030.
In the U.S. alone, Goldman Sachs estimates that as many as 15 million adults, representing roughly 13% of the U.S. obese adult population, could be treated with weight-loss drugs by 2030.
In a recent Goldman Sachs research report, senior biopharmaceuticals analyst Chris Shibutani wrote:
“The obesity market is still in its early stages. The chronic weight management market is undergoing an inflection, in our view, with potential for solid growth ahead and a peak opportunity that, by our estimates, could ultimately yield some of the highest-grossing drugs of all time.”
Top Weight-Loss Stocks to Watch in 2024
Considering that leading analysts such as Goldman’s Chris Shibutani have stated that the obesity drug market “is still in its early stages” with the potential to expand 16x to $100 billion in the next six years and that the market opportunity could “yield some of the highest-grossing drugs of all time,” this is a sector investors should have exposure to moving forward.
That said, here are two top weight-loss drug stocks to watch in 2024 and beyond.
Novo Nordisk (NYSE: NVO)
Founded in 1923 and headquartered in Denmark, Novo Nordisk (NYSE: NVO) is a leading healthcare company that manufactures and markets pharmaceutical products globally. The company employs approximately 63,400 people in 80 countries and focuses its operations on obesity care, diabetes and biopharmaceuticals.
As a leading player in the field of obesity science, Novo Nordisk aims to make obesity a healthcare priority, provide better access to evidence-based care and ultimately defeat the stigma associated with obesity. Novo Nordisk, along with its partners, is working to change the way obesity is treated, prevented and viewed by the world.
Novo Nordisk’s main drug is Semaglutide, which the company markets to treat type 2 diabetes under the brand name Ozempic. The company also markets Semaglutide as a treatment for obesity under the brand name Wegovy.
Ozempic and Wegovy are prescription medicines that come in prefilled pens to be injected under the skin of the belly, thigh or upper arm.
Ozempic and Wegovy have been wildly successful drugs for Novo Nordisk, helping to bolster the company’s better-than-expected 2023 earnings, which it reported on January 31, 2024.
Fueled by the strong demand and soaring sales of its obesity and diabetes drugs, the company reported a 36% jump in revenue to $33.71 billion.
The company expects demand to continue rising, forecasting sales growth of 18% to 26% in 2024.
Novo Nordisk’s R&D pipeline includes eight additional obesity drugs currently in clinical trials:
- Phase 1: Subcutaneous Amycretin, Oral Amycretin and INV-347
- Phase 2: GELA and INV-202
- Phase 3: Oral Sema Obesity, CagriSema and Semaglutide 7.2 mg
NVO Analyst Ratings & Price Target
Shares of Novo Nordisk last traded at $123.96, down -2.3% today. YTD, NVO stock is up +21.4% and over the past year is up +57.01%. All-time, NVO shares have increased by +53,795.65%.
Eli Lilly (NYSE: LLY)
Founded in 1876 and headquartered in Indianapolis, Indiana, Eli Lilly (NYSE: LLY) is a leading medicine company dedicated to turning science into healing to make life better for people around the world. The company employs more than 42,000 people globally.
Eli Lilly is focused on harnessing the power of biotechnology, chemistry and genetic medicine to solve some of the world’s most significant health challenges such as diabetes care and treating obesity.
One of the company’s missions is to address the misperceptions of obesity and help people living with obesity by ensuring the right medicines get to the right people.
Eli Lilly’s main obesity drug is Tirzepatide, which is marketed by the company under the brand name Zepbound.
Zepbound is an injectable prescription medicine created to help adults who are obese or overweight and also have weight-related medical problems, lose weight and keep it off.
On February 6, 2024, Eli Lilly reported its Q4 2023 earnings announcing the company’s Q4 revenue grew by 28% to $9.4 billion, fueled by the success of new products such as Zepbound. FY 2023 revenue grew by 20% to $34.1 billion.
Zepbound was approved by the FDA on November 8, 2023, for obese or overweight adults with weight-related comorbidities.
Despite only launching in the U.S. market in Q4 2023, Q4 global sales of Zepbound reached $175.8 million.
Eli Lilly is projecting strong revenue growth in 2024 of 18.4% – 21.9%, driven by the high demand for its new products such as Zepbound.
Eli Lilly’s R&D pipeline includes seven additional obesity drugs currently in clinical trials:
- Phase 1: Amylin Agonist Long Acting and DACRA QW II
- Phase 2: Bimagrumab and Mazdutide
- Phase 3: Orforglipron, Retatrutide and Tirzepatide
LLY Analyst Ratings & Price Target
Shares of Eli Lilly last traded at $768.08, down -1.02% today. YTD, LLY stock is up +29.70% and over the past year is up +112.04%. All-time, LLY shares have increased by +19,345.06%.
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Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks mentioned in this article.
