The trillion-dollar weight-loss bonanza is causing a major stir in the corporate world. The introduction of GLP-1 agonist drugs, such as Wegovy, has led to significant changes in the market. The impact of these drugs is not only felt by individuals seeking to lose weight but also by major corporations. The market value of WW (formerly Weight Watchers) plummeted by 90% following the launch of Wegovy in America. Even Oprah Winfrey, a prominent figure associated with the dieting firm, announced her departure from the board and the sale of her shares due to potential conflicts of interest related to her use of GLP-1s. Additionally, food giants like Nestlé are preparing for a future where the demand for sugary snacks decreases due to the use of these drugs. The influence of weight-loss drugs is evident in the discussions of consumer-goods firms, with a significant increase in mentions during quarterly earnings calls.
The impact of these drugs is not limited to consumers but also extends to the companies that manufacture them. Sales of Wegovy, developed by Novo Nordisk, have skyrocketed from $876 million in 2022 to $4.5 billion in 2023, with expectations of doubling this year. Similarly, Zepbound, introduced by Eli Lilly, is projected to generate $2.9 billion in sales in its first full year. The future of weight-loss medications looks promising, with forecasts predicting annual sales to reach $80 billion by 2030. Novo Nordisk and Eli Lilly are expected to dominate the market, with a combined market share of over 90%.
The success of these weight-loss drugs has translated into significant financial gains for the manufacturers. Novo Nordisk’s market capitalization has more than tripled in the past three years, making it Europe’s most valuable company with a market capitalization of $560 billion. Similarly, Eli Lilly’s market value has more than doubled since the beginning of 2023, reaching $740 billion. These developments have positioned Novo Nordisk and Eli Lilly as the world’s two largest pharmaceutical companies by market capitalization.
2024-03-04 16:03:58
Original from www.economist.com