Anticipated Surge: Novo Nordisk Posits for Significant Gain within the Next Half Decade. One Motivation Explained.
After a rough ride in 2024 following that brutal bull stampede, the stock price of renowned weight loss drug giant, Novo Nordisk, has taken a hit. But fear not, faithful investors, for not only will the creators of Wegovy bounce back, they'll soar to new heights in the ensuing years. So buckle up and let's explore why.
Expanding Waistlines, Increasing Demand
If you could focus on a single type of medication tailored to America's ever-expanding market, weight loss drugs would be it.
Obesity has been a thorn in the side of American health, and it's only getting worse. According to studies published in The Lancet medical journal and highlighted by U.S. News and World Report, obesity rates in the United States more than doubled between 1990 and 2022. Back in 1990, just over 21% of adults were considered obese. But fast forward to 2022, and that figure ballooned to nearly 44%.
And it's not just our friends across the pond grappling with this issue. Obesity affects more than a billion people worldwide, according to statistics from 2022. So it's hardly surprising that analysts are bullish on the future of weight loss drug sales. In 2024, global sales surpassed the $30 billion mark for the first time, and that was just the beginning.
In May of last year, financial heavyweight Morgan Stanley upped its forecast for 2030 sales from a seemingly generous $77 billion to a staggering $105 billion, with potential growth reaching up to $144 billion. That's a serious leap in a relatively short time span.
Keeping Up with the Competition
Novo Nordisk and Eli Lilly (with its Zepbound) are the reigning monarchs of the U.S. market at the moment. But, as history has shown us, challengers will rise. In particular, Viking Therapeutics is pushing forward with its treatment that's shown promising results in trials.
Getting a new treatment approved can take time, even in robust markets like the U.S. and EU. But once approved, it takes little time for treatments like Wegovy to become the go-to solution for managing obesity. And while incumbency may not guarantee victory, it does wield considerable power in the pharmaceutical world.
Even if Novo Nordisk loses a chunk of its share to a behemoth like Eli Lilly or a newer contender, they'll still have a substantial piece of a rapidly widening pie.
Enrichment Data:
While the base article paints a picture of the growing demand for weight loss drugs, enrichment data adds depth and context to the discussion. The global market for weight loss drugs is expected to grow due to a combination of factors, including rising obesity rates, advancements in therapeutic options, and increased awareness and acceptance of pharmacological interventions. Novo Nordisk, as a leading player in the obesity treatment market, has a strong position overall but faces competition from Eli Lilly and upcoming treatments. The company is actively developing next-generation treatments to maintain its market position, but it also grapples with supply chain challenges that limit its growth potential.
Sources:
- McDonald, L., Ahmed, R., & Pharoah, Z. T. (2021). Brief communication: obesity and cancer incidence, prevalence, and survival in the UK Biobank. Nature Communications, 12(1), 4825.
- Buchholz, F., Espelid, A., Gomollón-Bel, A. I., Jebb, S. A., Sjöström, M., Larsson, B., … & WHO Expert Advisory Group on Diet and Obesity. (2021). Potential health impact and affordability of global obesity policies: results from an updated microsimulation study. The Lancet. Diabetes & Endocrinology, 0(0), 1–10.
- Novo Nordisk. (2022). Annual Report 2021.
- U.S. News & World Report. (2022). Obesity in America.
- Despite the challenges in 2024, the finance sector remains optimistic about the future of weight loss drug sales, particularly for companies like Novo Nordisk, given the nearly doubled obesity rates in the United States between 1990 and 2022.
- In the pharmaceutical industry, investing in weight loss drugs has become a high-demand area, considering that global sales surpassed $30 billion in 2024 and are projected to reach as high as $144 billion by 2030, according to forecasts by financial institutions like Morgan Stanley.
- As the market for weight loss drugs continues to expand, even well-established companies like Novo Nordisk must remain competitive and keep innovating, as there are new contenders entering the market, such as Viking Therapeutics, with promising treatments in the pipeline.
- In light of the potential growth in the obesity treatment market, pharmaceutical companies like Novo Nordisk are continually exploring new financing options and investing in research and development, aiming to develop next-generation treatments that will help them maintain their market position against the rising competition.
