Anyone who’s been on a food plan can likely relate: Those first lost kilos are met with a way of euphoria. The voice inside one’s head screams: “I’ve got this!” But then, it inevitably becomes a slog. The initial novelty wears off, and the true work begins. Investors may even see a parallel to the initial elation around Novo Nordisk ‘s Wegovy and Eli Lilly ‘s Zepbound. The drugs, which mimic incretin hormones corresponding to GLP-1 and GIP to regulate blood sugar, suppress appetite and aid weight reduction, offering patients the promise of results that approach the degrees seen by bariatric surgery. The medical community cheered the once-a-week injections as game changers, and investors bid up the stocks, seeing a blockbuster opportunity. But it surely didn’t last. Yuri Khodjamirian, chief investment officer at Tema ETFs, told CNBC that investors hit “peak excitement” last summer. The firm manages the Tema GLP-1, Obesity & Cardiometabolic ETF (HRTS) , and stays optimistic in regards to the category’s long-term growth potential. Especially as market leaders Novo and Lilly present further clinical evidence that GLP-1s work to enhance overall health beyond weight reduction. Still, the mood has cooled because the pace of growth has proven unpredictable, resulting in earnings disappointments and frustrated investors. Because the outlook for GLP-1 medications has grown murkier, some stocks that were expected to suffer from the drugs’ success have recovered. Each Novo and Lilly have spent billions to expand manufacturing capability to fulfill the tremendous demand. The businesses have also needed to contend with drug compounders encroaching on their business by exploiting a loophole that enables pharmacies to make versions of medication in shortage . Where the burden loss trade heads in 2025 can be determined by further ramp-ups in supply, news on next-generation drugs within the pipeline, and regulatory clarity on drug pricing and GLP-1 access. “Lilly and Novo need to begin to deliver higher results,” Khodjamirian said. “That is going to profit all of the players. After which the orals could begin to unlock that one final bit. … Once you could have orals, the market starts to expand in size.” Oral versions of the drugs can be easier for a lot of patients to take, especially those leery of once-a-week injections which are currently needed. Also, they’re inexpensive and easier to fabricate, which is able to ease supply bottlenecks. Trillion-dollar market cap ahead? Phase 3 data on orforglipron, Lilly’s oral GLP-1 drug, is anticipated next yr. Positive data could put the stock back on its march to a $1 trillion market capitalization. Throughout the first half of the yr, Lilly’s stock seemed destined to achieve the milestone. But as of Friday’s close, its shares had fallen 13% over the past six months. 12 months thus far, the stock continues to be up nearly 33%, outpacing the S & P 500’s 26% gain. LLY YTD mountain Eli Lilly shares yr thus far. Analysts remain optimistic about Lilly’s outlook. In accordance with FactSet, 77% rate the stock a buy or chubby; just one is at a sell. The shares are expected to rise greater than 30% from Friday’s close of $767.76 to a mean price goal of $1,008. Nonetheless, the stock is not resistant to the political environment that has pressured pharmaceutical stocks. There’s concern that Robert F. Kennedy Jr., President-elect Donald Trump’s selection to go the U.S. Department of Health and Human Services, might restrict GLP-1 use, in keeping with Barclays analysts. But it surely’s unclear how Kennedy might prioritize various policy initiatives if he’s confirmed. Also, there have been positive comments by Elon Musk about GLP-1 drugs, which could support the category. “We see Lilly in a powerful position to work creatively with the brand new administration to expand access to GLP1s (albeit recognizing that there’s at all times a trade-off between access & price),” Bernstein analyst Courtney Breen wrote in a recent note to clients. Compared with Novo, she expects Lilly has a slight advantage as a U.S.-based company and a faster path to scaling production volume. Meanwhile, the Biden administration had proposed a rule that might have allowed Medicare and Medicaid to cover weight reduction drugs. Lilly and Novo have been working to assemble clinical evidence that GLP-1 medications help conditions corresponding to sleep apnea and reduce cardiovascular risk — a technique that has helped more patients gain coverage. It’s unclear whether the brand new administration will take up this cause, or leave a ban on coverage of weight reduction drugs in place on the federal insurance programs. CagriSema disappoints Hope for Novo’s stock had rested on clinical trial data for CagriSema, its next-generation obesity drug. When the news broke Friday, the corporate saw $125 billion in market value vanish. Patients within the trial lost a mean of twenty-two.7% of their weight after 68 weeks. The result was below the 25% to 30% range Novo had anticipated, though the Danish company said it was “encouraged” by the information . With Novo shares trading at their lowest level in 18 months, average analyst price targets estimate the stock could rebound 58% in the approaching yr. Several analysts said Friday’s response was too severe and was the fault of a poorly structured trial and lofty expectations. NVO YTD mountain Novo Nordisk shares yr thus far Like Wegovy and Ozempic, CagriSema is run via a weekly injection and accommodates semaglutide. Nonetheless, the drug also includes cagrilintide, a separate molecule that acts like amylin, a pancreatic hormone. The load loss patients achieved within the trial topped Wegovy’s average of 15%, and was on par with Zepbound’s nearly 23% end in clinical studies. And a few 40.4% of those enrolled within the CagriSema trial lost greater than 25% of their starting weight. Further, not all of the patients took the very best dose of the drug, resulting in questions on how the study was constructed. Novo said it was going to start a latest trial in the primary half of next yr and would likely submit the drug for regulatory approval late next yr. In accordance with Stifel analyst Eric Le Berrigaud, 25% looked like a “magic number” because it will have made CagriSema the product that might be likely to present patients the best likelihood at significant weight reduction and ahead of rival Lilly’s Zepbound. Novo is facing pressure to minimize its dependence on semaglutide, the energetic ingredient in each Wegovy and diabetes drug Ozempic, as it could wind up on the following list of medication for Medicare price negotiation. “[Semaglutide] is anticipated to represent, across the several formulations and brand names, about 70% of group’s revenues in 2027 and even though it continues to be a part of CagriSema, the cagrilintide component of the mixture can be protective for what the drug generates,” Le Berrigaud wrote in research note ahead of the discharge of the trial data. Others within the pipeline Zealand Pharma , one other company working on an amylin analog drug, fell Friday, reacting to Novo’s news. Its shares are up 80% yr thus far. Novo’s experience underscores how difficult it is going to be for upstarts to unseat the duopoly that has been built with Lilly. Amgen last month announced its experimental drug MariTide helped patients shed 20% of their weight . At one point, this is able to have been cheered as an enormous advancement, but now investors need more to be impressed. Amgen shares fell on the news, and are down nearly 9% yr thus far. VKTX YTD mountain Viking Therapeutics shares yr thus far. But dozens of firms, each large and small, are still in pursuit of the holy grail. One reason is that the potential market is vast, and patients must proceed these drugs in perpetuity so as to keep their advantages. Some players may emerge with a producing advantage, while others may create a drug that gives health advantages which are a greater fit for some patients. So the sphere will remain crowded. Amongst these stocks, Viking Therapeutics shares are “quite interesting,” Tema’s Khodjamirian said. “Their data is quietly higher and higher, while their share price has been taking place.” Viking Therapeutics shares have risen 127% yr thus far, however the stock, which closed at $42.25 on Friday, has greater than halved because it hit an all-time high of $99.41 back on Feb. 28. Beyond Big Pharma As obesity drug stocks faltered, the opposite side of the burden loss drug trade has rebounded. These stocks include diabetes technology providers corresponding to Dexcom and Insulet . Dexcom shares are still down greater than 35% this yr, however the stock has climbed almost 14% over the past three months. Insulet has fared even higher. Its shares are up about 20% this yr, because of a 34% rally over the past six months. DXCM YTD mountain Dexcom shares yr thus far Barclays analysts are anticipating that 2025 can be “an inflection point” within the GLP-1 narrative, because the variety of patients taking the drugs is much lower than the potential market size. Increased drug production will make it possible for extra patients to get access. Which will mean food and beverage stocks will see a more pronounced impact from changes in consumer habits, they said. Firms corresponding to Nestle and Conagra have began to develop latest products to serve this market. Campbell Soup has commented on how soup is perhaps well suited to those taking these medications. Barclays analysts expect Danone , with its protein-packed yogurt brands, may very well be “the most important potential winner from the GLP-1 landscape.” European-listed shares are up about 9% yr thus far “Health is actually at the guts of Danone’s brand and ethos — and that is reflected in its portfolio, of which 90% is deemed suitable for every day consumption and is non-HFSS (high fat salt & sugar),” said Barclays analyst Warren Ackerman, in a research note dated Dec. 16. “With protein products potentially becoming increasingly more popular as GLP-1 users look to fortified products to tackle muscle wastage, Danone’s Oikos product has the high-protein advantages consumers is perhaps on the lookout for.” Along with watching penetration — or the number of individuals taking incretin medications — compliance can be a problem, as many patients stop taking these drugs inside a yr. “Against the present market backdrop, whereby more assets are coming to the market, and with an expected shift in regulation that may very well be constructive for deal-making, we expect GLP-1 considerations to stay topical within the food and beverage sector,” said Priya Ohri-Gupta, an analyst at Barclays U.S. consumer division. Correction: Amgen last month announced its experimental drug MariTide helped patients shed 20% of their weight. An earlier version misstated the timing. Insulet shares are up about 20% this yr. An earlier version misstated the proportion.
Genentech launches direct to consumer program for flu pill Xofluza
An indication is posted in front of a Genentech office on June 12, 2025 in South San Francisco, California. Justin...
