EXCLUSIVE: Roundhill Investments Launches Weight Loss ETF For Exposure To Blockbuster Drugs Like Ozempic
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 21 2024
0mins
Source: Business Insider
- Roundhill Investments Launches New ETF: Roundhill launched the world's first GLP-1 & Weight Loss ETF (OZEM) focusing on weight loss drugs like GLP-1 agonists.
- Market Potential for Weight Loss Drugs: Market for weight loss drugs could grow significantly by 2030, with OZEM investing heavily in companies like Eli Lilly and Novo Nordisk.
- Revolutionary Weight Loss Drugs: New drugs promise significant weight loss compared to traditional methods, driving demand for precision-focused exposure through ETFs like OZEM.
- ETF Details: OZEM is actively managed, priced at 0.59%, and offers specific exposure to key companies in the weight loss drug sector.
- Industry Dynamics: Despite new entrants like Hims & Hers Health offering generic versions of weight loss drugs, industry prices are expected to decline as more drugs enter the market.
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Analyst Views on NVO
Wall Street analysts forecast NVO stock price to rise
8 Analyst Rating
4 Buy
3 Hold
1 Sell
Moderate Buy
Current: 38.580
Low
42.00
Averages
54.67
High
70.00
Current: 38.580
Low
42.00
Averages
54.67
High
70.00
About NVO
Novo Nordisk A/S is a global healthcare company engaged in diabetes care. The Company is also engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The Company operates through two business segments: diabetes and obesity care, and biopharmaceuticals. The Company's diabetes and obesity care segment covers insulin, GLP-1, other protein-related products, such as glucagon, protein-related delivery systems and needles, and oral anti-diabetic drugs. The Company's biopharmaceuticals segment covers the therapy areas of hemophilia care, growth hormone therapy and hormone replacement therapy. The Company also offers Saxenda product to treat obesity. It offers a range of products, including NovoLog/NovoRapid; NovoLog Mix/NovoMix; Prandin/NovoNorm; NovoSeven; Norditropin, and Vagifem. As of December 31, 2016, it marketed its products in over 180 countries. Its regional structure consists of two commercial units: North America and International Operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Eli Lilly Leads U.S. Weight Loss Drug Market
- Market Share Leadership: Eli Lilly commands a 60% share of the U.S. weight loss drug market, driven by strong performance of its tirzepatide products (Mounjaro and Zepbound), solidifying its leadership in the rapidly growing weight loss sector.
- Competitive Landscape: Viking Therapeutics is advancing its VK2735 candidate through clinical trials, with strong results suggesting it could enter phase 3 trials in Q3, indicating potential competition against Lilly and Novo Nordisk's offerings, intensifying market rivalry.
- Demand and Supply Dynamics: The demand for weight loss drugs remains high, at times exceeding supply, providing Viking with an opportunity to carve out market share if its candidate successfully completes trials and gains regulatory approval.
- Investment Opportunity: Despite Eli Lilly's stock dropping about 8% this year, its forward P/E ratio has decreased to 28x, indicating a favorable investment opportunity in this weight loss leader, especially with the potential regulatory approval of its oral weight loss drug on the horizon.
See More
Eli Lilly vs. Viking Therapeutics in Weight Loss Drug Market
- Market Share Leadership: Eli Lilly commands a 60% share in the weight loss drug market, bolstered by investments in manufacturing capacity and head-to-head studies showing superior weight loss efficacy compared to Novo Nordisk, solidifying its leadership in the U.S. market.
- Strong Product Performance: Lilly's Mounjaro and Zepbound achieved triple-digit revenue growth in the latest quarter, and despite an 8% drop in stock price this year, it trades at a forward P/E of 28, reflecting market confidence in its growth prospects.
- Clinical Trial Progress: Viking Therapeutics is advancing its VK2735 candidate into phase 3 trials, showing strong performance, and with demand for weight loss drugs exceeding supply, successful regulatory approval could carve out significant market share for the company.
- Potential Market Opportunity: Lilly's oral weight loss drug is under regulatory review and could be approved in the coming weeks, serving as a catalyst for its stock price, making this an opportune time for investors to consider shares in this weight loss drug leader.
See More
Hims & Hers Partners with Drugmakers to Boost Weight-Loss Market
- Stock Volatility: Hims & Hers shares are currently down 65% from their highs but surged 50% in March due to a deal with a weight-loss drugmaker, indicating market optimism about its future potential.
- Market Dominance: The weight-loss drug market is dominated by Novo Nordisk and Eli Lilly, both of which have seen revenues grow by approximately 200% over the past decade, reflecting strong demand and profitability in this sector.
- Partnership Impact: The collaboration between Hims & Hers and Novo Nordisk aims to streamline the delivery of weight-loss drugs, which is expected to boost customer demand, although Hims & Hers remains barely profitable as a drug reseller.
- Industry Outlook: Weight-loss drugs are considered the fastest-growing pharmaceutical category in history, potentially leading to significant improvements in global obesity health outcomes, and will continue to drive market performance for related drug companies in the coming years.
See More
Hims & Hers Stock Rises After Settlement with Novo Nordisk
- Settlement Impact: Hims & Hers' stock surged 50% in March following its settlement with Novo Nordisk, although it remains down 65% from its peak, indicating cautious optimism about its future prospects.
- Industry Giants' Dominance: The dominance of Novo Nordisk and Eli Lilly in the weight-loss drug market is increasingly evident, with both companies seeing approximately 200% revenue growth over the past decade, while Hims & Hers struggles with profitability as a drug reseller.
- Massive Market Potential: Weight-loss drugs are considered the fastest-growing pharmaceutical category in history, potentially leading to significant improvements in global obesity health outcomes and driving increased demand for these medications.
- Investor Focus: Although Hims & Hers was not recommended as a top investment by The Motley Fool, its partnerships with industry giants may provide support for future market performance, making it a stock worth watching for investors.
See More
Analyst Downgrades Lilly, Market Expectations for Obesity Drugs Too High
- Elevated Market Expectations: Analysts believe that expectations for the total addressable market for obesity drugs exceed $150 billion, while projections suggest it may only reach $80 billion to $120 billion by 2032, indicating overly optimistic market sentiments that could negatively impact Lilly's stock performance.
- Rating Downgrade Impact: HSBC analyst Rajesh Kumar downgraded Lilly's rating from 'Hold' to 'Reduce' and lowered the price target from $1,070 to $850, suggesting a potential downside of about 14%, which could undermine investor confidence.
- Drug Approval Progress: Lilly's oral obesity pill orforglipron is currently under FDA review, with a decision expected in April; however, analysts caution that expectations for its launch may be too high, as compliance and persistence with the drug could disappoint.
- Intensifying Competition: Lilly's oral drug only led to a 12.4% weight loss in clinical trials, compared to Novo Nordisk's Wegovy, which achieved a 16.6% reduction, highlighting Lilly's competitive disadvantages that may affect its market share.
See More
HSBC Downgrades Eli Lilly, Shares Drop 6%
- Market Expectation Downgrade: HSBC analysts project the GLP-1 obesity market to be between $80 billion and $120 billion by 2032, significantly lower than the consensus of over $150 billion, indicating that market optimism regarding Eli Lilly's future growth may be overly optimistic.
- Intensified Price Competition: Analysts argue that price competition in the GLP-1 market is likely to be significant, although Lilly's 2026 guidance suggests the company will achieve enough volume growth to offset pricing pressures from its agreement with the Trump administration, which could impact profitability.
- Cash-Pay Dependency Risk: Eli Lilly's reliance on the cash-pay market could become problematic if the U.S. economy slows down, particularly as middle-class consumers may have less disposable income to spend on GLP-1 drugs, potentially limiting sales and affecting company performance.
- Compliance Concerns: HSBC expresses concerns about the long-term performance of Lilly's upcoming obesity pill, suggesting that the market's assumptions about patient adherence are inconsistent with discontinuation rates observed in clinical trials, which may increase investment risk.
See More
Eli Lilly Leads U.S. Weight Loss Drug Market
- Market Share Leadership: Eli Lilly commands a 60% share of the U.S. weight loss drug market, driven by strong performance of its tirzepatide products (Mounjaro and Zepbound), solidifying its leadership in the rapidly growing weight loss sector.
- Competitive Landscape: Viking Therapeutics is advancing its VK2735 candidate through clinical trials, with strong results suggesting it could enter phase 3 trials in Q3, indicating potential competition against Lilly and Novo Nordisk's offerings, intensifying market rivalry.
- Demand and Supply Dynamics: The demand for weight loss drugs remains high, at times exceeding supply, providing Viking with an opportunity to carve out market share if its candidate successfully completes trials and gains regulatory approval.
- Investment Opportunity: Despite Eli Lilly's stock dropping about 8% this year, its forward P/E ratio has decreased to 28x, indicating a favorable investment opportunity in this weight loss leader, especially with the potential regulatory approval of its oral weight loss drug on the horizon.
See More
Eli Lilly vs. Viking Therapeutics in Weight Loss Drug Market
- Market Share Leadership: Eli Lilly commands a 60% share in the weight loss drug market, bolstered by investments in manufacturing capacity and head-to-head studies showing superior weight loss efficacy compared to Novo Nordisk, solidifying its leadership in the U.S. market.
- Strong Product Performance: Lilly's Mounjaro and Zepbound achieved triple-digit revenue growth in the latest quarter, and despite an 8% drop in stock price this year, it trades at a forward P/E of 28, reflecting market confidence in its growth prospects.
- Clinical Trial Progress: Viking Therapeutics is advancing its VK2735 candidate into phase 3 trials, showing strong performance, and with demand for weight loss drugs exceeding supply, successful regulatory approval could carve out significant market share for the company.
- Potential Market Opportunity: Lilly's oral weight loss drug is under regulatory review and could be approved in the coming weeks, serving as a catalyst for its stock price, making this an opportune time for investors to consider shares in this weight loss drug leader.
See More
Hims & Hers Partners with Drugmakers to Boost Weight-Loss Market
- Stock Volatility: Hims & Hers shares are currently down 65% from their highs but surged 50% in March due to a deal with a weight-loss drugmaker, indicating market optimism about its future potential.
- Market Dominance: The weight-loss drug market is dominated by Novo Nordisk and Eli Lilly, both of which have seen revenues grow by approximately 200% over the past decade, reflecting strong demand and profitability in this sector.
- Partnership Impact: The collaboration between Hims & Hers and Novo Nordisk aims to streamline the delivery of weight-loss drugs, which is expected to boost customer demand, although Hims & Hers remains barely profitable as a drug reseller.
- Industry Outlook: Weight-loss drugs are considered the fastest-growing pharmaceutical category in history, potentially leading to significant improvements in global obesity health outcomes, and will continue to drive market performance for related drug companies in the coming years.
See More
Hims & Hers Stock Rises After Settlement with Novo Nordisk
- Settlement Impact: Hims & Hers' stock surged 50% in March following its settlement with Novo Nordisk, although it remains down 65% from its peak, indicating cautious optimism about its future prospects.
- Industry Giants' Dominance: The dominance of Novo Nordisk and Eli Lilly in the weight-loss drug market is increasingly evident, with both companies seeing approximately 200% revenue growth over the past decade, while Hims & Hers struggles with profitability as a drug reseller.
- Massive Market Potential: Weight-loss drugs are considered the fastest-growing pharmaceutical category in history, potentially leading to significant improvements in global obesity health outcomes and driving increased demand for these medications.
- Investor Focus: Although Hims & Hers was not recommended as a top investment by The Motley Fool, its partnerships with industry giants may provide support for future market performance, making it a stock worth watching for investors.
See More
Analyst Downgrades Lilly, Market Expectations for Obesity Drugs Too High
- Elevated Market Expectations: Analysts believe that expectations for the total addressable market for obesity drugs exceed $150 billion, while projections suggest it may only reach $80 billion to $120 billion by 2032, indicating overly optimistic market sentiments that could negatively impact Lilly's stock performance.
- Rating Downgrade Impact: HSBC analyst Rajesh Kumar downgraded Lilly's rating from 'Hold' to 'Reduce' and lowered the price target from $1,070 to $850, suggesting a potential downside of about 14%, which could undermine investor confidence.
- Drug Approval Progress: Lilly's oral obesity pill orforglipron is currently under FDA review, with a decision expected in April; however, analysts caution that expectations for its launch may be too high, as compliance and persistence with the drug could disappoint.
- Intensifying Competition: Lilly's oral drug only led to a 12.4% weight loss in clinical trials, compared to Novo Nordisk's Wegovy, which achieved a 16.6% reduction, highlighting Lilly's competitive disadvantages that may affect its market share.
See More
HSBC Downgrades Eli Lilly, Shares Drop 6%
- Market Expectation Downgrade: HSBC analysts project the GLP-1 obesity market to be between $80 billion and $120 billion by 2032, significantly lower than the consensus of over $150 billion, indicating that market optimism regarding Eli Lilly's future growth may be overly optimistic.
- Intensified Price Competition: Analysts argue that price competition in the GLP-1 market is likely to be significant, although Lilly's 2026 guidance suggests the company will achieve enough volume growth to offset pricing pressures from its agreement with the Trump administration, which could impact profitability.
- Cash-Pay Dependency Risk: Eli Lilly's reliance on the cash-pay market could become problematic if the U.S. economy slows down, particularly as middle-class consumers may have less disposable income to spend on GLP-1 drugs, potentially limiting sales and affecting company performance.
- Compliance Concerns: HSBC expresses concerns about the long-term performance of Lilly's upcoming obesity pill, suggesting that the market's assumptions about patient adherence are inconsistent with discontinuation rates observed in clinical trials, which may increase investment risk.
See More
