New drugs that slim down patients are boosting the stocks of companies that may benefit from the next chapter in weight loss.

The medicines known as glucagon-like peptide agonists, or GLP-1s, are making waves with celebrity influencers as well as investors, sending shares of Eli Lilly and Novo Nordisk soaring. WW International, better known as WeightWatchers, also surged after a deal that would help people gain access to the drugs.

GLP-1s work by simulating a hormone that helps people feel full after eating – and lose weight in the process. They are opening up a market that’s expected to grow more than ten-fold from 2022 revenue levels and could include more than 100 million adults in the U.S. alone. While initially intended for diabetics, a social media frenzy and off-label use has seen sales of the weekly injections swell – and driven shortages.

“Investors are excited about it because it’s a huge market – it’s bigger than diabetes and so there’s a huge runway,” Michael Shah, a Bloomberg Intelligence analyst, said in an interview. For smaller biotechnology companies, solid data on their own weight-loss drugs could make them acquisition targets, potentially driving up stock prices, he added.

Novo, the maker of the competing Wegovy and Ozempic, has more than doubled to become one of the most valuable companies in Europe since its shots gained Food and Drug Administration approval in 2021. Shares of Lilly are up nearly 40% since U.S. regulators approved Mounjaro, its GLP-1, last May. Last week’s positive weight loss data and better-than-expected sales are helped drive the stock to new heights on Tuesday.

BI estimates revenue from drugs to treat obesity could top $33 billion globally in 2030. That nascent market is why investors are so excited about companies developing their own injections, working on oral versions or helping patients access the treatments. Biotechnology stocks including Viking Therapeutics Inc. and Amgen Inc., also got GLP-1 related boosts.


Amgen jumped to a record in November after promising early data on its experimental once-a-month shot, AMG 133. Shares have since come back to earth, falling roughly 19% from the all-time high.

Viking Therapeutics shot up by nearly 70% in one day in March its obesity treatment met the main goals of an early-stage study. With a larger trial expected to start mid-year, the small-cap stock closed at a record Monday.

WeightWatchers has had two obesity-drug related stock spikes. The first was in early March, when it soared 79% in a single day after announcing a $132 million deal for Sequence, a telehealth provider that offers access to obesity drugs. The company jumped 59% in April after completing the acquisition.

But setbacks can be painful, especially for smaller drug developers. Altimmune shed 55% after a mid-stage trial of its obesity drug raised concerns about side-effects and nearly a quarter of patients taking the medication quit the study.

Investors will continue to watch the space for progress. Next up, Lilly is expected to file to expand Mounjaro’s use into weight loss. Then there’s the ongoing Novo “Select” study looking at potential cardiovascular benefits, that’s slated to release results midyear.

Proving that these drugs have benefits beyond weight loss could be instrumental in getting them covered by insurance outside of diabetes, Guggenheim analyst Seamus Fernandez said. Otherwise, they’re seen as largely cosmetic and can come with a hefty price tag.

“We are not reimbursing Botox and fillers for wrinkles,” Fernandez said.

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