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3 stocks that could skyrocket by 2027 thanks to the development of weight loss drugs

David Boulder
18. 4. 2024
4 min read

In recent years, stocks of companies focused on the treatment of obesity and diabetes have been gaining in popularity. Given the growing health problems associated with obesity, which the COVID-19 pandemic has further accentuated, this market seems very promising. The increasing number of obese people in the world and the increased awareness about the risks associated with excessive body weight are leading to a greater demand for effective solutions.

As health systems across the globe strive to better control these chronic conditions, the importance of pharmaceutical innovation in this area continues to grow. Technological advances and improved clinical practices are further supporting the development of new, more effective drugs. The following three companies could dominate the market and offer significant opportunities for investors in the coming years.

Eli Lilly $LLY+0.1%

Eli Lilly, one of the world's leading pharmaceutical companies, specializes in developing drugs for a wide range of diseases, including diabetes and obesity. In 2021, the company announced that its diabetes drug Mounjaro not only helps regulate blood sugar levels, but also enables significant weight loss in patients. This discovery was supported by data from clinical trials in which the average weight loss in patients was 12 % of their body weight over 72 weeks of treatment. Given these results, Mounjaro is fast becoming a key product in the company's portfolio.

In the field of obesity treatment Eli Lilly recently launched another important drug called Zepbound. Analysts estimate that this drug could generate annual revenues of up to $25 billion, which would have a major impact on the company's financial performance. With obesity on the rise, affecting over 650 million adults worldwide, according to the World Health Organization (WHO), demand for effective drugs such as Zepbound is expected to continue to grow.

LLY

Eli Lilly

LLY
$807.86 $0.43 +0.05%

Investing in innovation and development is key for Eli Lilly. In 2023, the company invested approximately 6.7 billion dollars, a significant increase from previous years. This investment allows the company to not only expand its portfolio of drugs, but also to maintain a competitive advantage in the rapidly evolving pharmaceutical industry. With these steps, Eli Lilly is well positioned to face future challenges and maintain its position as a leader in the healthcare industry.

Novo Nordisk $NVO-1.4%

Novo Nordisk, a Danish pharmaceutical company, is known for its significant contributions to the treatment of diabetes and obesity. As the global leader in "GLP-1" therapy, the company has experienced significant growth, with total revenues of approximately 21 billion USD, an increase of 12% over the previous year. A significant contributor to this success was their newest injection, Wegova, which has been approved for the treatment of obesity and is showing excellent results in clinical trials, with patient weight loss o 17 %.

In addition to the weight loss injections Novo Nordisk is also working hard to develop an oral form of the medication "GLP-1", which could be beneficial for those who prefer tablets to injections. In 2023, the company announced that its weight loss pill is entering Phase 3clinical trials, thelast step before its expected launch. This advancement could mean a major change for millions of obesity patients looking for an effective and more easily accepted form of treatment.

NVO
$134.08 -$1.96 -1.44%

Strategic investment in research and development is key for Novo Nordisk to maintain its competitive advantage. Last year, the company invested more than $3 billion in new product and technology development, representing approximately 14 % of its total revenue. This investment not only supports innovation in existing therapies, but also opens the door to new therapeutic options that may in the future impact lives of patients around the world.

Viking Therapeutics $VKTX+4.2%

Viking Therapeutics is a biotechnology company focused on developing therapies for metabolic and "endocrine" disorders, including obesity and type 2 diabetes. Their lead drug candidate, VK2809, is focused on treating non-alcoholic "In a Phase 2 clinical trial, VK2809 demonstrated significant improvements in lipid profile and reductions in liver fat in patients, which is key to combating NASH, a disease that affects approximately 3% to 5% of the world's population.

Viking Therapeutics is also exploring potential in the treatment of obesity with its novel candidate VK5211, which is in clinical development. This drug, aimed at weight management, has shown promising results in preliminary studies, achieving an average weight loss of 5% over 12 weeks. These data represent a potential breakthrough in anti-obesity drug development.

Despite the challenges associated with the high cost of research and development, which in 2022 reached 50 million USD 50 million, Viking Therapeutics continues to invest in its research portfolio. This strategy is focused on long-term results and shareholder value creation. With their continued commitment to innovation and advancing the drug development stage, Viking Therapeutics stands on the threshold of opportunities that could significantly impact the market for the treatment of metabolic disorders and obesity.

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