Subscribe to enjoy similar stories. In terms of recent stock-market frenzies, the Ozempic trade nearly tops the list, second only to speculation that artificial intelligence will soon be writing this column. Powerful weight-loss drugs like Wegovy and Zepbound have driven nearly $1 trillion in market-capitalization gains, with most of those gains flowing to Eli Lilly and Novo Nordisk, the dominant players in the obesity-drug market.
Would-be challengers such as Amgen and Viking Therapeutics have also seen their shares surge on promising data. Two major factors have powered these gains. First, the health benefits seem genuine: Clinical trial data for GLP-1 drugs have shown not only impressive weight loss but also potential reduced risk of heart attacks and sleep apnea.
Second, there is exploding consumer demand, being driven in part by the psychological gratification that many people experience as their weight drops. That has fueled huge patient demand that, until very recently, has outstripped supply while creating a booming industry for compounders and telehealth companies. But with so much optimism now priced into these stocks, further growth will be more challenging.
Already, Lilly and Novo stocks have begun to lose momentum. It isn’t that Wall Street doubts the massive opportunity to treat hundreds of millions of people with obesity worldwide; rather, investors are anticipating several pivotal commercial and clinical developments that could either keep the party going at nosebleed valuations or lead many to take a breather. All eyes will be on Novo Nordisk when the Danish company prepares to report quarterly results on Wednesday.
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