The Tribune

By CHRIS ILLING

CCO @ ActivTrades Corp

PHARMACEUTICAL companies typically compete with each other in various areas such as research and development, marketing and sales. Some of the biggest pharmaceutical companies in the world include Pfizer, Novartis, Roche, Merck & Co and Sanofi, and all of them are being traded on the various stock exchanges.

The latest battlefield is the market for weight loss products and weight loss management, which is forecast to reach about $400bn in size by 2030. The growth of this market is attributed to the increasing rate of obesity and rise in lifestyle diseases. But pharmaceutical companies are not the only competitors in the weight loss industry. Other competitors include companies that produce weight loss supplements, fitness and wellness programs, and even surgery centers that offer bariatric surgery as a weight loss solution. There is also competition from natural remedies and lifestyle changes such as exercise and diet modifications.

But a new type of drug is generating excitement among the pharmaceutical companies as well as the rich and beautiful. Hollywood stars love it. Kim Kardashian swears by it, and Elon Musk has used it successfully. Just one injection is enough, and the pounds will melt off. Sounds pretty tempting. A real hype has already broken out in social media networks. The new class of drugs is called GLP-1 recptor agoinists. It is already being sold by Novo Nordisk under the brand name Wegovy in the US, Denmark and Norway, and will soon be available in other countries. Ozempic, a lower-dose version, is a diabetes drug that is also being used ‘off label’ for weight loss. The drug is only approved for the treatment of diabetes and obesity. For these people, the syringe is obviously a game changer. Wegovy has been difficult to obtain since its approval in 2021. Due to manufacturing issues, supplies were limited, preventing Novo Nordisk from exploiting its lead on its closest competitor. And long-time competitor, Eli Lilly, is catching up with Tirzepatide, in which test subjects used in one study lost 21 percent of their weight.

The market for this sort of drug seems to only increase with time and the change in our lifestyle habits. Two out of every five persons worldwide were overweight in 2020, and the COVID pandemic made us even more aware of this growing problem. In 2035, more than 4bn people worldwide will be overweight or obese.

Obesity can contribute to cardiovascular disease, diabetes and various types of cancer. And these illnesses can be very costly for each country and all involved industries. The increase in obesity will reduce global gross domestic product (GDP) and hamper the development of low income countries. In absolute figures, the greatest economic damage is to be expected in China, the US and India. It will cost China an estimated $10trn by 2060, while the US will have to budget $2.5trn in damage and India $850bn. Obesity will reduce GDP by about 10 percent in The Bahamas by 2060.

Therefore, it is no surprise that the pharmaceutical companies are spending tons of money to be on the forefront of the latest craze. The share prize for Novo Nordisk has jumped 42 percent year-over-year. Eli Lilly has seen an increase of 23 percent. Compare this to the share price changes year-over-year of Novartis and Pfizer, and you can see the impact the new kind of drug has made.

Overall, the weight loss industry is highly competitive with a variety of companies competing for market share. It represents a great opportunity for the savvy investor.