ETFs
ETFs will benefit from the boom in weight-loss drugs – June 4, 2024
Two dominant investment themes over the past year have been AI and weight loss drugs. Although there is a lot of excitement around AI, especially with NVIDIA (NVDA – Free report), shares of two companies that dominate the weight-loss drug market have also surged over the past year due to growing demand for their products.
Eli Lilly Shares (THERE IS – Free report) have grown more than 89% over the past year and its market capitalization has surpassed that of Tesla (TSLA – Free report) earlier this year. Shares of Novo Nordisk (NVO) are up more than 73%, making it the largest European company in terms of market value.
More than a billion people worldwide live with obesity, a figure expected to affect more than half of the population by 2035. Obesity is linked to many health risks, including diabetes, heart disease, stroke and cancer.
GLP-1 medications mimic the effects of the natural hormone glucagon-like peptide-1, which is produced in the gut after eating. These drugs were initially used to treat diabetes, but were later found to be effective in controlling blood sugar levels, reducing appetite, and promoting weight loss.
Recent studies suggest that GLP-1 medications may also slow the progression of Parkinson’s symptoms and reduce the severity of sleep apnea.
According to Goldman Sachs, the market for these drugs could reach $130 billion by 2030, with Eli Lilly and Novo Nordisk retaining around 80% market share.
There are 232 anti-obesity drugs in various stages of development, according to the Financial Times. Next-generation weight loss drugs aim to reduce costs as well as common side effects like nausea and muscle loss.
To learn more about the Tema Obesity & Cardiometabolic ETF (SHR – Free report), Roundhill GLP-1 and Weight Loss ETF (OZEME – Free report) and Amplify Weight Loss Drug & Treatment ETF (THNR – Free report), please watch the short video above.
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