Can the Obesity Drug Market Meet High Expectations?

Lazard Insights — Lazard Asset Management

December 07, 2023


The promise of GLP-1 receptor agonists to help lower blood sugar levels and promote weight loss has captured headlines and propelled investor expectations for the segment.

GLP-1 receptor agonists are a class of drugs that primarily stimulate glucose-dependent insulin release from the pancreas. They also delay gastric emptying, inhibit inappropriate post-meal glucagon release, and reduce food intake.

While these drugs have historically been used to treat type 2 diabetes, recent clinical trials from Novo Nordisk for its GLP-1 drug, Wegovy, and from Eli Lilly for its GLP-1 competitor, Mounjaro, have supported significant weight loss in overweight and obese patients (on average, 15% for Wegovy and 21% Mounjaro).

While the obesity segment is perhaps the largest potential end market within the global drug industry, Lazard Asset Management believes the degree of investor enthusiasm may, in some cases, be excessive. In this piece, Rhett E. Brown, Managing Director and Research Analyst, discusses recent developments, attempt to rationalize market expectations, and explain the implications on drugmakers and medical device companies.

Click here to read the piece on the Lazard Asset Management website.

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