Novo Nordisk’s Wegovy weight reduction drug has seen a meteoric rise in popularity.
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LONDON — The rapid rise of weight reduction drugs like Wegovy and Mounjaro is generating a number of recent product lines as firms hope to land on the precise side of the health care disruptor.
Industries spanning food and beverage to retail and fitness have come under the highlight amid surging demand for Novo Nordisk and Eli Lilly’s so-called miracle drugs over concerns that they may dramatically shift consumer habits.
Nevertheless, some firms say they’re embracing the newfound market opportunity.
Dutch Bioscience firm DSM Firmenich told CNBC Wednesday that it’s exploring dietary supplements to enhance and compensate for a few of the impacts of the burden loss drugs, with CEO Dimitri de Vreeze describing it because the natural progression for the industry.
“Should you go to weight reduction and also you’re successful, you progress to the health, nutrition, lifestyle counter, since you mainly need to proceed what you may have. There we come into play,” de Vreeze told CNBC’s “Squawk Box Europe.”
The burden loss injections, which depend on a bunch of medicine called GLP-1 receptor agonists (glucagon-like peptide 1), which work by imitating a naturally occurring gut hormone that helps regulate appetite within the brain.
Studies remain ongoing over a few of the further health applications — and potential unintended effects — of the appetite-suppressing drugs. But de Vreeze said his company was also products to spice up muscle retention and protein intake.
“There are some unintended effects of weight reduction drugs and which means it’s tougher to accumulate muscle, it’s tougher to maintain your protein level up. And here we come into play. We’re using ingredients, developing ingredients where that is being form of compensated for,” he said.
Novo Nordisk and Eli Lilly didn’t immediately reply to CNBC’s request for comment on the comments.
Consumer goods to airlines
DSM isn’t the one company in search of to capitalize on the growing marketplace for weight reduction drugs.
Swiss food giant Nestle announced last month that it’s launching a latest frozen food range geared toward GLP-1 drug users. The Vital Pursuits range, which is able to initially feature 12 items including whole grain bowls and pizzas, is designed as a dietary “companion” to the drugs, the corporate said.
CEO Mark Schneider told CNBC last week that while weight reduction drugs were shifting consumer behaviors, “dietary needs don’t go away.”
GLP-1 drugs will “definitely be an interesting addition to all the opposite needs that we’re trying to satisfy within the food industry,” Schneider said.
Danone CEO Antoine de Saint-Affrique also told CNBC in April that he sees GLP-1s as “complementary” to the French food company, adding that they might only increase demand for its dietary products.
Whether weight reduction meds will leave consumers kind of prone to reach for healthy products isn’t yet certain, nonetheless, in line with Barclays analysts.
“Greater adoption of GLP-1 drugs may very well be regarded as an alternative to categories of food products which might be more attuned to health and wellness,” analyst Andrew Lazar said in a research note last yr.
“That said, consumers could also eat more weight management foods as they strive to eat healthier and substitute such products over more indulgent snacking alternatives,” he added.
Such shifts could have similar implications for restaurants, food retailers and delivery firms that “proactively pivot” to embrace the drugs, the bank’s analysts added. It cited fast food firms including KFC’s Yum Brands and Shake Shack as potential beneficiaries if consumers view the drugs as “offsetting” such indulgences.
Airlines could also profit massively from trimmer passengers as they grow increasingly preoccupied by reducing jet-fuel costs. In a September note cited by Bloomberg, Jefferies analyst Sheila Kahyaoglu said United Airlines would save $80 million a yr if the common passenger weight fell by 10 kilos.
Even pharmaceutical packaging firms could stand to realize, Barclays said, with firms like Germany’s Gerresheimer seeing a possible 2-4% revenue boost from the estimated $100 billion weight reduction drug industry.
Growing weight reduction drug competition
It isn’t yet clear whether such ancillary products can replicate the meteoric rise of weight reduction drug firms like Novo Nordisk and Eli Lilly.
“We think it is just too early for investors to take definitive positioning outside of healthcare stocks on the impact of GLP-1 drugs, and the range of potential scenarios may be very wide,” Barclays analysts wrote.
Asked whether rising demand for dietary products was being reflected in his company’s share price, de Vreeze acknowledged it was “too early” to say.
“It’s something which it’s good to construct over time. It’s within the pipeline. However the moment that changes, you will notice that being reflected,” he said.
The brand new products come as other pharmaceutical firms are nipping on the heels of Novo and Eli in a bid to assert a share of the burden loss pie.
In China, a key marketplace for the drug, around 15 generic versions of Ozempic and Wegovy are currently being developed, according clinical trail records cited by Reuters Thursday.
Meantime, some analysts have also voiced caution over the continued rise of the burden loss drug market itself.
“We do not necessarily think that ‘miracle’ drugs shall be miracle drugs ceaselessly,” Guillaume Menuet, EMEA head of investment strategy and economics at Citi Wealth, told CNBC Thursday.
