The Industrial Revolution initiated a trajectory of innovation that leads us to a modern sedentary age overshadowed by an obesity epidemic. Alarming CDC statistics reveal that a startling 1 in 5 adults in the US face obesity, with 22 states clocking obesity rates exceeding 35% in 2022.
The escalating perils linked to obesity catapult the weight loss market into a realm of lucrative growth. Based on Dimension Market Research from January, investors are gearing up for a remarkable journey with an expected Compound Annual Growth Rate (CAGR) of 10.3%. This trajectory will propel the market size from $165.5 billion in 2023 to a staggering $399.3 billion by 2032.
New groundbreaking drugs promise to accelerate this growth further. The burning question remains – which pharmaceutical players are strategically positioned to reign over this burgeoning weight loss landscape?
Pfizer: Weathering Controversies and Setting Sail for Growth
Amidst the swirl of controversial vaccine distribution, Pfizer Inc has found itself embroiled in legal tussles. Despite facing lawsuits from Texas and Kansas related to vaccine-related adverse events, support from governmental bodies makes hefty punitive measures seem less likely.
The aftermath of the vaccine episode cast a shadow on PFE stock, dampening demand and tugging it from its pinnacle of $55 in December 2021 to a 52-week average of $29.96, currently pricing at $28.66 per share.
Despite the setback, Pfizer’s diversified drug portfolio promises stability. Q1 ‘24 earnings forecast total revenue for the year between $58.5 to $61.5 billion, aligning with previous projections. The quarter witnessed a revenue of $14.88 billion, 19% lower than the prior year, yet surpassing the forecasted $14.01 billion.
Novo Nordisk: A Dominant Force in the Weight Loss Arena
The Danish pharma juggernaut, Novo Nordisk, stormed into the obesity market with a blaze, wielding Wegovy and Ozempic as its primary arsenal. Q1 earnings unveiled a stellar 24% sales growth, fueled by the success of these GLP-1 drugs. Novo Nordisk now commands a 34% stake in the obesity market and a dominating 55.3% share in the GLP-1 realm.
Wegovy witnessed a meteoric rise from DKK 4.5 billion to DKK 9.38 billion, juxtaposed with Ozempic’s triumph in diabetes, raking in DKK 4.3 billion, marking a 35% YoY surge. Both drugs harness semaglutide as their key ingredient.
The company’s net profit catapulted by 28% YoY to DKK 25.4 billion, approximating $3.65 billion, renowned as Europe’s most valuable entity. Moving forward, Novo Nordisk aims to fortify its foothold in the obesity/diabetes domain, readying multiple drug launches.
Eli Lilly: Carving a Path to Triumph in Weight Loss Industry
Indianapolis-based Eli Lilly and Company etched its name in the obesity landscape through Trulicity (dulaglutide), a GLP-1 receptor agonist introduced in the US in November 2014. The FDA’s green light for additional Trulicity doses in type 2 diabetes marked a notable milestone in September 2020.
Eli Lilly’s pedigree of success in drug launches, spanning from the iconic Prozac for depression to the pioneering Iletin insulin in the 1920s, sets the stage for its obesity and diabetes endeavors. Bolstering revenue growth are Mounjaro, Zepbound, and Jardiance. Q1 earnings boasted a 26% sales hike to $8.76 billion, culminating in a net income of $2.2 billion.
Debates brew over Eli Lilly’s supremacy against Novo Nordisk, particularly in the efficacy of Mounjaro and Zepbound vis-à-vis the counterparts. Recent findings lean favorably towards Eli Lilly, with tirzepatide showcasing a remarkable 15.3% weight loss, triumphing semaglutide’s 8.3% annual weight shedding. This led to tirzepatide’s green signal in China in May.
While both companies gear up to tackle the Chinese market, Eli Lilly’s tirzepatide sets itself apart with a patent extending to January 2036. LLY stock, presently soaring at an all-time high of $943, is significantly above the 52-week average of $668. The meteoric rise seems to hint at investors anticipating another Prozac-esque hit where a drug morphs into a treatment legend.
However, a storm looms on the horizon for Novo Nordisk, with the patent on semaglutide nearing expiration in 2026, potentially paving the way for a deluge of Chinese generic obesity medications. A familiar narrative that unfolded in the EV market may repeat itself.
Investors brace for volatile fluctuations, with NVO stock currently dancing at $142.37, striving towards the $166 zenith, contingent on competitive moves and drug rollout triumphs.