The impact of recent weight reduction treatments is being felt well beyond the health-care industry . Analysts used the ritual of quarterly earnings calls to probe firms on whether their businesses were being helped — or hampered — by the most recent trend. Drugs that mimic gut hormones resembling glucagon-like peptide-1, or GLP-1, were first used to treat diabetes, but have gained favor as obesity treatments. These drugs have helped people shed more kilos than previous therapies, creating excitement that has pushed up the shares of Novo Nordisk , the maker of Ozempic and Wegovy, and Eli Lilly , which makes Mounjaro. Threat or opportunity? “We actually don’t see this as a threat, but we see it as a chance,” said Joe Scalzo, CEO of The Simply Good Foods Co. , during a call with analysts in late June. Simply Good owns low-carb food brand Atkins, in addition to Quest, which focuses on healthier versions of snacks resembling cookies and chips. Scalzo said the corporate has positioned itself as a “lifestyle” brand, and Atkins pitches its products to advertise health by either maintaining weight or losing smaller amounts. In the corporate’s fiscal third quarter, sales rose 2.6% to $324.8 million from a yr ago. Regeneron co-founder George Yancopoulos echoed Simply Good’s opportunity mindset, saying the biotechnology company’s muscle preservation and growth offerings could possibly be used to mitigate potential uncomfortable side effects from the drugs related to muscle loss. “We’re very actively pursuing every little thing that we are able to imagine,” he said. Walmart ‘s management brought up GLP-1 medications for the second straight quarter. Throughout the fiscal first quarter, the corporate called out a shift in consumer behavior toward healthier foods as they sought to overhaul their habits, and said the lower-margin fruits, vegetables and fresh meat pressured its profits. Throughout the second quarter, which beat expectations , shoppers were still focused on health and wellness, CEO Doug McMillon said Thursday. But the corporate was also excited in regards to the expected increase generally merchandise sales within the second half of the yr and raised its full-year estimates. WMT KR YTD mountain Walmart and Kroger in 2023 Kroger management said growing demand for weight reduction drugs boosted its prescription sales but not necessarily its profits given the treatments’ relatively low margins. The food market chain parted ways with Express Scripts at first of the yr, and sales would have fallen further without the impact of the pricey GLP-1 drugs, which might cost greater than $1,300 monthly. Cardinal Health also said the medications provided a tailwind to its revenue for an additional quarter. The corporate raised its fiscal 2024 pharmaceutical sales outlook, citing help from the drugs. Employers watch health-care costs Greater than 40% of the U.S. adult population is taken into account obese, and a few worry health-care costs will rise rapidly because the drugs turn into widely used. Some firms already bar weight reduction medications from their insurance policy to maintain costs down. A latest evaluation released this week found these drugs cost significantly more within the U.S. than in other countries. One company feeling the pressure is skilled services firm Insperity . Its management pointed to higher-than-expected pharmacy costs as a headwind within the quarter. Executives said it was tied to a rise in specialty drug use for weight reduction and diabetes. Still, management questioned if it is going to turn into a long-term issue, with CEO Paul Sarvadi likening the drugs to a “fad.” He said the medication is getting used in ways it wasn’t originally designed for and that its use could wane on account of “some long-term effects that should not positive for people.” Eli Lilly’s Mounjaro hasn’t yet been approved for weight reduction, though some persons are taking it off label for that reason. The Food and Drug Administration is anticipated to approve it later this yr. Also, some persons are taking these drugs to lose small amounts of weight, which is different from patients being treated for obesity. That said, biotech and pharmaceutical industry analysts expect more insurance firms to offer coverage of the drugs within the wake of last week’s study that showed promising heart health data for those on Wegovy. The businesses are attempting to make the case that patients dropping pounds will turn into healthier, which is able to result in lower costs over time. Novo Nordisk and Eli Lilly have been racing to ramp up production capability amid surging demand. Product packager AptarGroup , which provides components used for 3 of the drugs available on the market, reported sales inside its injections division were flat in its fiscal second quarter yr over yr but 50% higher than the prior quarter . CEO Stephan Tata said firms are beginning to secure future capability from Aptar. ATR YTD mountain Aptar shares are up 10% because the start of the yr. Still, Tata hedged on tying future performance to a singular business opportunity. While calling it “exciting growth,” he noted that the injection products accounted for less than a small portion of total revenue last yr. “In our business, there is no single project that may be a big needle mover,” Tata said on the decision late last month. “It’s a numbers game, however the numbers game looks good.”
Novo Nordisk shares fall after Alzheimer’s drug trial fails to hit goal
A view shows a Novo Nordisk sign outside its office in Bagsvaerd, on the outskirts of Copenhagen, Denmark, on July...
