Ozempic short-selling wave storms ASX
Ozempic, the wonder drug used to treat diabetes that has become a global phenomenon as a weight-loss treatment, is challenging the blue-chip status of some of the ASX’s best known companies as short sellers bet the blockbuster drug and its equivalents will wreak further havoc on market valuations.
As shorts placed against consumer staples stocks outpace longs by 4:1 on Wall Street according to Goldman Sachs, the reach of appetite-suppressing drugs is going beyond food and beverage stocks.
There has been a global shortage of Ozempic since early 2022 because of an unexpected increase in demand due to use of the drug for weight loss. Alex Ellinghausen
CSL fell 3.5 per cent last week and 6.3 per cent on Thursday alone after Novo Nordisk halted a study early because Ozempic’s efficacy in treating kidney disease was immediately apparent. CSL hosts an investor day on Monday.
“In many ways this theme is a short seller’s dream,” said DNR Capital analyst Chris Tynan. “You can extrapolate the impact of a successful fat drug into so many consumer angles. This hasn’t really hit the mainstream retail investor in Australia yet but in the US it’s making real waves, and institutional shareholders in Australia are taking notice.”
In Australia, there is a shortage of such drugs due to surging demand for off-label use, leading Novo in September to alert the Therapeutic Goods Administration that supply of Ozempic will be limited for the rest of this year and 2024, the regulator said.
Shares in sleep apnoea specialist ResMed have also been under selling pressure.
Walmart told analysts on Thursday in the US the effect of so-called GLP-1 drugs is not one-sided, remarking that categories such as fitness, and associated medications, are improving
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