Since August, the diet pill market has been booming. The market capitalization of Novo Nordisk and Lilly, two major weight loss drug manufacturers, has soared, and overnight it once again reached a record high.
As stock prices soar,Eli Lilly also became the world's first pure pharmaceutical company with a market capitalization of over 500 billion US dollars.whereasNovo NordiskThe market capitalization has surpassed the French luxury goods giant LVMH Group.Rise to the next generation of European market capitalization. According to the World Bank's official website, Denmark's GDP will only be 395.4 billion US dollars in 2022, making it an invincible country.
However, behind the rise of the “magic medicine for weight loss,” the weight loss industry is undoubtedly bearing the brunt of the storm and preparing for disruption.Once known as the “apple” of the fitness field - fitness equipment giant$Peloton Interactive (PTON.US)$However, it is experiencing a life or death incident.When the pandemic was raging, its market capitalization once soared to a peak of nearly $50 billion, but now it has fallen to less than $2 billion.
Just how popular are diet pills?
In the latest US stock earnings season, artificial intelligence (AI) is no longer the most popular topic discussed by analysts and executives. This topic has a strong competitor — “GLP-1 diet pills,” and the latter is no less popular than AI.
The number of mentions of diet pills such as Ozempic, Wegovy, and Mounjaro is soaring in the latest earnings season. Agency statistics show that compared with the same period last year, the number of mentions of “GLP-1” in the minutes of the US stock Q2 performance meeting has more than doubled.
In addition, S&P 500 Pharmaceuticals mentioned obesity/GLP-1 in the second-quarter earnings conference call, as shown in the figure below. Among them, Lilly mentioned 40 times.
Furthermore, since the beginning of last year, the magic medicine for weight loss, meglutide has created a trend where weight loss people compete to buy it, and soon the products began to run out of stock. And inUnder the rush of American consumers, Novo Nordisk's GLP-1 drug was sold out on a large scale, even causing real diabetics to have no medicine to use.
It is worth noting that in the US market,Current law prohibits Medicare from covering weight loss medications. This means that weight loss drugs, such as Simei's weight loss version Wegovy, are completely self-funded products in the US market. No insurance, useWegovy may cost more than $16,000 a year.
In October of last year, Tesla CEO Musk also stood for diet pills. He said that in addition to fasting, Wegovy is also one of his tips for losing weight. Furthermore, under the “Amway” of many Hollywood actors, smeglutide has set off a frenzy of following suit and weight loss around the world, so it is also known as the “magic medicine for weight loss.”
How amazing is the ability of diet pills to absorb money?
Last month, Eli Lilly announced results for the second quarter and first half of 2023 that exceeded expectations.
According to the data, Lilly's total revenue for the first half of the year was 15.272 billion US dollars, an increase of 7% over the previous year. Among them, second-quarter revenue was US$8.312 billion, an increase of 28% over the previous year.The GLP-1 dual-target drug, tirzepatide, showed strong performance. Tirzepatide continued to be released after being approved for marketing by the FDA in May 2022, and sales for the first half of 2023 were 1,548 billion US dollars.
Eli Lilly expects sales of this drug to exceed $4 billion in 2023. The company also updated its 2023 performance guidelines in this quarterly earnings report, and it willPerformance guidelines increased by 2.2 billion US dollars, and annual revenue is expected to reach 33.4 to 33.9 billion US dollars.
Novo Nordisk's total revenue for the first half of 2023 was DKK 107.667 billion (US$15.961 billion), up 29% year on year; operating profit reached 48,895 billion DKK (US$6.927 billion), up 30% year on year.
Among them,Simeglutide (including Ozempic, Rybelsus, and Wegovy) achieved sales results of 62.166 billion Danish kroner (US$9.215 billion) in the first half of this year, carrying “half of Novo Nordisk's revenue.”
What do analysts think?
At a time when weight loss drugs are soaring all the way up, financial blog ZeroHedge is even shouting“Diet pills are the new AI”The tone.
According to Goldman Sachs, a major Wall Street executive, obesity is widespread in the US, and an increase in this type of disease will have a huge impact on the economy. Goldman Sachs stated in the report,
Obesity costs the US healthcare system 170 billion US dollars every year, and by 2035, the impact of this chronic disease will reduce global GDP by 4 trillion US dollars, equivalent to the GDP of Germany, the fourth largest economy in the world, in 2022, and diet pills, which focus on GLP-1 therapies, are expected to revolutionize this trend.
The bank said,The diet medicine market has nearly doubled nine times from just over $5 billion this year to 44 billion US dollars in 2030, and this increase will greatly benefit Novo Nordisk and Lilly's diet pills.
Goldman Sachs portfolio manager Jenny Chang said that the weight loss drug market “has historically been limited,” and as regulation “gives the green light” to more such new drugs, this batch of promising new drugs can fully enter the market.
Coincidentally, a research report by Morgan Stanley shows,By 2030, the global diet medicine market is likely to reach 77 billion US dollars.It was more than $20 billion higher than the bank's initial forecast.
J.P. Morgan recently also raised sales expectations for diet pills.It is estimated that by 2030, under the control of the “oligopoly” of Novo Nordisk and Lilly Pharmaceuticals, annual sales of GLP-1 agonist-related drugs will exceed 100 billion US dollars.Meanwhile, J.P. Morgan also predicts that China's weight loss drug market is expected to reach 14.9 billion US dollars by 2030. The line says,
Novo Nordisk could account for nearly half of the rapidly growing global diet medicine market, equivalent to around $33 billion in potential sales by 2030.Analysts say the Danish drugmaker will be the biggest beneficiary of changes in treatment for obesity and cardiovascular disease.
Also, since Eli Lilly is likely to receive approval from the US FDA (Food and Drug Administration) this year to start selling Mounjaro for weight loss,J.P. Morgan rated the company's stock as “overbearing,” with a target share price of $600 per share.
Editor/Somer