The Ozempic Craze Could Put These Companies on a Crash Diet

livemint.com:

Pfizer, whose products were instrumental during the pandemic, is worth $200 billion. Until recently, though, investors in industries that help treat the consequences of obesity weren’t really sweating. But after a study was released this month showing Novo Nordisk’s Wegovy (the weight-loss version of Ozempic) helped reduce heart attacks and strokes, companies that make medical devices like glucose-monitoring systems and sleep-apnea machines plunged in value.

Developers of drugs for fatty liver disease, which is linked to obesity, have also fallen sharply. Expectations for this class of drugs have gotten so big that investors are reckoning with a potential hit to even more industries linked to obesity. Some analysts are even starting to project that reduced cravings could moderately curb demand for fast-food restaurants and packaged snacks.

To understand the potential impact on some sectors, it is important to bear in mind that drugs like Ozempic and Mounjaro don’t just let you binge on french fries guilt-free. These drugs, originally developed to treat Type 2 diabetes, mimic a gut hormone called glucagon-like peptide-1, or GLP-1, which helps suppress appetite (Mounjaro mimics an additional hormone as well). People on drugs like Wegovy are less likely to crave Krispy Kremes.

And if they stay on the drug for years (unlikely at this stage due to restrictions on most insurance plans), their weight loss could help prevent all sorts of complications, like Type 2 diabetes. That could in turn mean fewer sales of things like insulin pumps and sleep apnea machines. And people who slim down could hit the cancel button on their dieting apps.