In this article, we will discuss the 10 Best GLP-1 and Weight Loss Stocks to Buy Now.
According to WHO, more than one billion people worldwide are obese, including 650 million adults, 340 million adolescents, and 39 million children. A brand-new class of weight-loss drugs that don’t require diets or intense exercise appears to be revolutionary. With the help of these revolutionary drugs, overweight and obese individuals can reduce their body weight by 15% to 20%. “This could be the biggest opportunity that we’ve ever seen in the pharma industry,” says Andy Acker, portfolio manager at Janus Henderson Investors. Without question, weight-loss drugs are popular. Investors are comparing the US weight-loss medicine pioneer, to the leader in artificial intelligence chips.
Morgan Stanley Research, in light of this surge in demand, now projects that the global obesity drugs market will reach $105 billion in 2030, up from a previous estimate of $77 billion. In 2023, branded obesity drugs generated $6 billion in sales.
In 2023, the obesity drug market leader Semaglutide (the generic name for Ozempic, Wegovy, and Rybelsus) was the most prescribed Glucagon-Like Peptide-1 GLP-1 agonist , accounting for more than 88% of all new prescriptions, as per Forbes. The only GLP-1 drugs for weight control that have FDA approval to date are tirzepatide, liraglutide, and semaglutide.
J.P. Morgan Research estimates that the GLP-1 market will reach $100 billion by 2030, fueled equally by diabetes and obesity. By 2030, there may be 30 million GLP-1 users in the United States, or around 9% of the total population. The growing demand for obesity medications will have a wide-ranging impact, benefiting sectors such as biotech while generating headwinds for others, including food and beverage.
Chris Schott, a Senior Analyst covering the U.S. Diversified Biopharma sector stated:
“GLP-1s have been used to treat T2D since 2005, starting with the approval of Byetta, with follow-on products continually improving on efficacy. The most recent, Ozempic and Mounjaro, offer significant advantages over previous products and have accelerated class growth,” “Indeed, the newest generations of GLP-1s and combos lead to 15-25+% weight loss on average, well above prior generations of products.”
Regarding the treatment of obesity, some are hailing the newest generation of GLP-1 medications as “miracle drugs.” However, not everyone with obesity can use GLP-1s due to their high cost and restricted insurance coverage. According to Jonathan Gruber, Professor of Economics and Chairman of the Economics Department at MIT, if 40% of Americans with obesity took these treatments at present pricing (about $15,000 per person), the annual cost would exceed $1 trillion. This nearly equals the amount of money the government spends on the whole Medicare program. That’s an astounding number, then.
Over the past ten years, the usage of GLP-1 drugs, such as semaglutide, for weight loss has doubled, but among those with type 2 diabetes, its use has decreased by almost 10%, according to research published on Monday in the Annals of Internal Medicine. The prolonged medication scarcity that followed, the researchers caution, may restrict the medications’ accessibility to those with diabetes. Dr. Yee Hui Yeo, a clinical fellow in the Karsh Division of Gastroenterology and Hepatology at Cedars-Sina, highlighted that as demand for obesity medications rises, it is critical to guarantee that diabetic patients have access to GLP-1 medicines.
The FDA claims that the shortages are the result of rising demand. Not only do the shortages impact the United States: The European Medicines Agency cautioned that the GLP-1 drug shortage is a “major public health concern” that is unlikely to be remedied in 2024. People with diabetes have struggled to obtain their prescriptions due to shortages, with some limiting their drugs to manage, according to NPR.
The experts on the panel “Weighing the Future of Obesity Drugs,” including Debra Netschert of Jennison Investments, Julia Angeles of Baillie Gifford, and Gentry Lee of Fayez Serofim, discussed the potential of GLP-1 drugs, which were initially developed for treating diabetes but are now being used to treat obesity. Netschert emphasized the progression of GLP-1 medication delivery, ranging from weekly dosages to several daily injections, as well as continuous attempts to reduce injection frequency further and minimize adverse reactions. Netschert pointed out that 1.5 million out of the 110 million eligible patients in the United States are currently undergoing treatment with GLP-1 drugs, despite their outstanding performance, because of production limitations. Netschert and Angeles argued over who pays the expense, with Angeles claiming that the majority of patients pay out of pocket while Netschert cited considerable reimbursement from Medicare/Medicaid and insurance. Netschert stated that outside the borders of the United States, these drugs may be needed by as many as 700 million individuals worldwide. Notably, the panel discovered that U.K. payors, who are typically strict, authorized GLP-1 drugs faster than any other country, highlighting their perceived value.
The obesity drugs market is a high-growth industry and since it’s in its early innings, now may be a time to add some weight loss stocks to your watchlists. Let’s now take a look at the 10 Best GLP-1 and Weight Loss Stocks to Buy Now.
M. A. Arkhipov/Shutterstock.com
Our Methodology
We sifted through holdings of weight loss ETFs and online rankings to form an initial list of 20 weight loss and GLP-1 stocks. Then we selected the 10 stocks that were the most popular among institutional investors. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them.
We used the companies’ year-over-year revenue growth as a tie-breaker in case two or more stocks had the same number of hedge fund holders. Also, we only considered stocks that received “Buy” or “Strong Buy” recommendations from analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10 Best GLP-1 and Weight Loss Stocks to Buy Now
10. Altimmune, Inc. (NASDAQ:ALT)
Number of Hedge Fund Investors: 19
Clinical-stage biopharmaceutical startup Altimmune, Inc. (NASDAQ:ALT) is dedicated to creating advanced, next-generation peptide-based medicines. Pemvidutide, a GLP-1/glucagon dual receptor agonist, is being developed by the company to treat obesity and MASH.
The safety of the medication pemvidutide, which was utilized in the Phase 2 clinical study, caused the stock to drop by more than 60% in 2023. This is because the trial included gastrointestinal (GI) adverse effects, such as nausea and vomiting. Following the release of encouraging Phase 2 clinical research findings for pemvidutide, a GLP-1/glucagon dual receptor agonist for obesity and metabolic dysfunction-associated steatohepatitis (MASH), shares of Altimmune, Inc. recently increased by about 30%. This medication, which is aiming for a ~$130 billion market, may compete with key obesity drug producers’ semaglutide and tirzepatide. The most recent research indicates the possibility of quick clearance and large revenue as it demonstrates significant weight loss while maintaining lean muscle.
Altimmune, Inc. (NASDAQ:ALT) reported a cash position of $182 million in Q1 2024, a 9.83% increase in cash over the same quarter the previous year, and a $24.3 million net loss. Despite being negative, the EPS has improved over the previous three years, suggesting that the company is heading toward profitability. Investor interest has been sparked by the encouraging findings from the Phase 2 MOMENTUM research for pemvidutide, amid financial challenges.
A mean weight reduction of 15.6% was seen at week 48 in the Phase 2 MOMENTUM trial of pemvidutide, which included 391 individuals. Interestingly, the medication resulted in a lean mass loss of 21.9%, with fat accounting for 78.1% of the weight reduction. Pemvidutide may be headed for approval and a double-digit billion-dollar revenue potential if it can demonstrate that it eliminates less lean muscle fat than rival GLP-1 agonist drugs.
GLP-1 reduces hunger and inflammation, whereas glucagon increases energy expenditure and mobilizes fat stored in the liver. These two mechanisms are combined in pemvidutide’s dual agonist mode of action. Its prospective best-in-class profile is aided by this distinctive technique.
In 2019, Altimmune purchased pemvidutide from Spitfire Pharma for $5 million upfront, with an additional $88 million payable in sales and development milestones if the medication becomes effective. In order to capitalize on its advantages over competitors in the obesity treatment sector, Altimmune, Inc. (NASDAQ:ALT) is still fully committed to developing this drug.
Though smaller in size than pharmaceutical behemoths, Altimmune is positioned as a possible rival because of its encouraging pemvidutide findings. However, the MOMENTUM trial found a high dropout rate of around 20% and substantial competition from current companies, posing major risks.
Analysts at JPM Securities highlighted the competitive profile of pemvidutide, noting that it shed more weight than semaglutide, improved lipid alterations and tolerability than tirzepatide, and had higher cardiac safety when compared to retatrutide. The capacity of Altimmune to maintain investor interest will rely on more positive evidence, as the competition is still quite strong.
Analysts urge investors to “Buy” ALT, which is now trading at $6.43 per share. The average price target of $18.8 implies an upside 192.38% from current levels. With no revolver debt, the company has about $46.0 million in cash and marketable securities. As of the end of the first quarter of 2024, 19 hedge funds out of 920 hedge funds had a stake in Altimmune, Inc. (NASDAQ:ALT), according to Insider Monkey’s data. Peter Rathjens, Bruce Clarke And John Campbell’s Arrowstreet Capital were the company’s largest stakeholders in Q1.
In a highly competitive market, Altimmune’s pemvidutide has an impressive growth story, especially considering its advantages for maintaining lean muscle. The company’s financial standing and the intensity of the competition are important factors. Even if the most recent data is encouraging, investors should exercise caution and keep a careful eye on any new events.
9. Structure Therapeutics Inc. (NASDAQ:GPCR)
Number of Hedge Fund Investors: 27
Clinical-stage biotechnology company Structure Therapeutics Inc. (NASDAQ:GPCR) is based in South San Francisco and has its headquarters in the Cayman Islands. Its primary emphasis is developing drugs that employ their oral small molecule platform to treat chronic illnesses. One program, GSBR-1290, is being advanced by the company to treat obesity and type II diabetes. Founded in 2016, Structure went public in February 2023.
The favorable GSBR-1290 findings recently caused shares of Structure Therapeutics Inc. (NASDAQ: GPCR) to rise by more than 50%, even though the drug’s 12-week effectiveness was not as good as that of amycretin. Nonetheless, it continues to face competition in the market for obesity treatments, which has led to a second capital raise. It is one of the best GLP-1 and weight loss stocks to buy, since Wall Street is in complete favor of Structure and GSBR-1290. Despite fierce competition, analysts highlight GSBR-1290’s potential to take a sizable portion of the market because of its oral formulation and encouraging interim results.
The 6 Wall Street analysts with 12-month forecasts for GPCR stock have an average price target of $82.17 and a consensus Buy rating. This average price target points to an upside of 132.05% from the current stock price of $35.41. At the end of Q1 of 2024, Structure Therapeutics Inc. (NASDAQ:GPCR) was held by 27 hedge funds.
On June 3, 2024, Structure announced a secondary offering and saw a spike in its stock price to $54.29, giving it a current market valuation of $2.02 billion. These events followed encouraging GSBR-1290 data.
An oral substitute for subcutaneous GLP-1 treatments is intended with GSBR-1290, a biased G-protein coupled receptor agonist. Its design focuses on the GLP-1 receptor without involving β-arrestin signaling, which may lead to improved glycemic management and weight reduction with fewer adverse effects.
As of March 31, 2024, Structure had $436.4 million in cash and investments, up 81.20% from the same quarter the previous year when it had no debt. Especially after using the stock market boom to generate more money, this strong cash position offers a runway well beyond 2027. Even though it is still negative, the EPS has steadily increased over the last two years, suggesting that the company is headed towards profitability.
Numerous oral weight-loss next-generation options are being advanced by the two main market leaders. For example, by week 12, amycretin showed a 13.1% weight loss. At 36 weeks, Lilly’s orforglipron indicated a 14.7% decline. At week 12, Structure’s GSBR-1290 demonstrated placebo-adjusted weight reductions ranging from 6.2% to 6.9%, placing it in line with orforglipron.
Although Structure Therapeutics Inc. (NASDAQ:GPCR)’s two main competitors possess formidable treatments and robust market positions, the oral formulation of GSBR-1290, together with encouraging preliminary data, presents competitive advantages. The road to defending Structure’s valuation is difficult, though, given the intense competition and the need for more effectiveness and tolerability evidence. Their financial position is strengthened by the recent capital raise, which enables them to progress their clinical studies and maybe carve out a place in the growing market for obesity therapy.
8. Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN)
Number of Hedge Fund Investors: 36
The goal of Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) is to create revolutionary life sciences products. Following Pfizer’s acquisition of its parent firm in 2022, Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) was founded and has given priority to several medication candidates undergoing various phases of clinical testing. Among its many pipeline products, Taldefgrobep Alfa (BHV-2000) is particularly noteworthy for its potential to treat obesity.
Taldefgrobep Alfa is scheduled for Phase 2 studies for obesity in 2024 and is presently undergoing Phase 3 clinical trials for Spinal Muscular Atrophy (SMA). This medication, a myostatin inhibitor, works to prevent muscle loss disorders by preventing the myostatin protein, which normally prevents the development of muscle. Given that increasing muscle mass might help weight reduction and improve metabolism, the drug is a good choice for treating obesity.
Taldefgrobep Alfa received a rare pediatric disease classification for SMA from the FDA, which might hasten the licensing process and signal a more favorable regulatory position. In order to ascertain the drug’s safety and effectiveness for managing weight, the Phase 2 obesity study, which is set to begin in 2024, will be crucial.
Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) has roughly $283.42 million in cash as of Q1 2024. Given the potential of Taldefgrobep Alfa, particularly in the event that Phase 2 findings are favorable, investor confidence and stock value may rise for BHVN. The stock is placed 8th on our list of the best GLP-1 and weight loss stocks to buy now.
Analysts have given BHVN a “Strong Buy” rating. The average price target for Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) is $54.7, which presents a 41.26% upside potential from the current price of $38.73. According to Insider Monkey’s Q1 2024 database, 36 hedge funds held a position in the company.
In light of BHVN’s relatively limited cash reserves and the possibility of future dilution, investors should exercise caution. Any unfavorable trial findings for Taldefgrobep Alfa can have a detrimental effect on the stock and raise the danger of dilution. Though there are challenges involved, you cannot overlook the company’s drug’s novel approach to treating obesity and the continued progress made in other treatment opportunities.
7. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Investors: 46
One of the top biopharmaceutical companies in the world, AstraZeneca PLC (NASDAQ:AZN) is renowned for its solid cancer therapy pipeline and its good growth profile. AstraZeneca intends to generate more than $80 billion in revenue by 2030 by proactively entering the markets for cardiometabolic treatments and weight reduction. AZN is one of the best GLP-1 and weight loss stocks to buy now.
Three initiatives, including ECC5004, are part of AstraZeneca’s obesity medication pipeline and are now undergoing Phase 1 clinical studies. This preliminary breakthrough demonstrates the company’s determination to establish itself as a major force in the market for obesity treatment.
AstraZeneca PLC (NASDAQ:AZN) has an average price target of $87.25 which implies a potential upside of nearly 10% from current levels. AstraZeneca PLC (NASDAQ:AZN) was owned by 46 of the 920 hedge funds that Insider Monkey examined in the first quarter of 2024. Ken Fisher’s Fisher Asset Management held the largest stake in the company worth $654.02 million.
AstraZeneca promised in late May to pay Swiss Biotech, SixPeaks Bio up to $80 million in milestone payments and royalties in exchange for the right to purchase their obesity candidate, which is presently undergoing pre-clinical testing. Compared to treatments from two main market leaders, SixPeaks’ strategy could cause less muscle mass loss, which might be a big benefit in the fight against obesity. As of right now, the advantages remain unproven, and the company has not made any data from its clinical-stage projects publicly available.
AstraZeneca’s primary focus is to invest in the weight-loss and cardiometabolic medicine fields in order to deliver novel treatments by 2030. It is anticipated that the company will progress its ongoing initiatives over the course of the upcoming year and possibly buy more assets to bolster its pipeline.
AstraZeneca PLC (NASDAQ:AZN) is a reliable grower. Over the past decade, the company’s revenue has grown at a compound annual growth rate of 6.4% and its net income has grown even more impressively at a CAGR of 12.28%.
AstraZeneca is in a strong position to benefit from its creative medicinal discoveries and calculated investments in the market for obesity treatment. The possible competition from other GLP-1 agonist medications could cause some investors to exercise caution. Nonetheless, AstraZeneca’s robust financial results, audacious expansion strategies, and exciting pipeline, which includes its obesity medication initiatives, provide a good foundation for it to grow. The company is well-positioned for success in the expanding market for obesity treatments because of its innovative strategies and strategic focus.
6. Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number of Hedge Fund Investors: 52
In the highly competitive weight-loss medication market, Viking Therapeutics, Inc. (NASDAQ:VKTX) is a small biotech company exhibiting great potential. Viking’s VK2735 has the ability to surpass competitors in clinical trials, despite the dominance of two strong competitors, making the stock an appealing investment with significant upside potential.
VK2735, a subcutaneous GLP-1/GIP dual agonist and Viking’s lead therapeutic candidate, has shown promising Phase 2 outcomes. After just 13 weeks, VK2735 at a dosage of 15 mg produced a placebo-adjusted mean weight reduction of 13.1% (14.7% from baseline). In contrast, the rival’s tirzepatide (Zepbound) achieved a greater weight reduction over a noticeably longer length of time than semaglutide (Wegovy), which exhibited an 8% decrease after 20 weeks.
Morgan Stanley projects the weight-loss medicine market to reach $105 billion by 2030, while Goldman Sachs anticipates an even bigger size of $130 billion. According to Goldman Sachs, by 2030, there will be about 19 million US adults who will take drugs for chronic weight-loss management in the U.S. market, representing a 17% market share. With its better early results, Viking’s VK2735 puts the business in a strong position to take a sizable market share, particularly if it can provide an oral alternative.
With an average analyst price target of $111 and a high of $138, Viking’s stock can be a multibagger. Analysts have collectively rated the stock as a “Strong Buy.” At its current price of about $55, the stock is a tempting investment opportunity with the possibility for significant long-term growth. In Q1 2024, 52 hedge funds were bullish on Viking Therapeutics, Inc. (NASDAQ:VKTX).
In the rapidly expanding weight-loss medication market, Viking Therapeutics is a stock to consider adding to your watchlists, if not your portfolios. VK2735 is an appealing option for acquisition by major pharmaceutical companies despite possible market saturation due to its excellent Phase 2 results. Viking Therapeutics, Inc. (NASDAQ:VKTX) is, therefore, one of the best GLP-1 and weight loss stocks to buy now.
5. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Investors: 60
Denmark-based Novo Nordisk A/S (NYSE:NVO) is a renowned healthcare company that was established in 1923. Its mission is to create change in the fight against major chronic illnesses, drawing on its diabetes legacy. Novo accomplishes this by leading the way in scientific discoveries, increasing accessibility to medications, and pursuing the prevention and eventual treatment of illness. Novo Nordisk promotes its products in around 170 countries and employs roughly 66,000 people across 80 countries. Producing about half of the world’s supply of insulin, the company is a leader in the treatment of diabetes and played a significant role in the development of insulin pens.
FDA- approved Ozempic and Wegovy, two of Novo Nordisk A/S (NYSE:NVO)’s diabetic and obesity medications, are becoming increasingly popular, which is a major driver for company’s top line. Originally developed as a diabetic treatment, Ozempic has drawn attention for its ability to help people lose weight. As of 2023, it accounted for 41% of Novo Nordisk’s sales. Wegovy, on the other hand, was created especially for weight control, contributing an additional 13.5%, highlighting their market influence and room to develop.
Novo Nordisk has received a license to begin marketing its blockbuster weight-loss treatment Wegovy in China, allowing the Danish pharmaceutical company to increase sales of the medicine that has propelled it to be one of the Europe’s most valuable companies. The license from China’s National Medical Products Administration would allow Novo Nordisk to begin marketing its injectable weight-loss drug in the world’s second-largest economy, with a population of over 1.4 billion people, according to United Nations figures. Considering that more than 11.2% of Chinese individuals have diabetes, this is noteworthy.
After growing by 42% at constant currency rates (CER) in 2023, the company’s diabetes and obesity care division expanded by 27% in Q1 2024. Ozempic and Wegovy are in high demand on the market, which is fueling this expansion.
Novo Nordisk raised its full-year forecast, estimating that at the midpoint of its guidance range, operating profit would expand by 26% and sales would rise by 23%. In 2023, the company’s EBIT margin was 44.1%, far greater than that of its competitors.
Novo Nordisk A/S (NYSE:NVO) is one of the best GLP-1 and weight loss stocks to buy now. Analysts hold a consensus Strong Buy rating on the stock. In Q1 2024, 60 funds owned NVO stock. Simon Wang’s Franchise Capital is the largest stakeholder in the company, with 136,172 shares worth $19.44 million.
Novo Nordisk is to construct a new $4.1 billion facility in Clayton, North Carolina, to accommodate the soaring demand for Wegovy. However, concerns have been raised regarding possible side effects, such as blindness, which affects 7-9% of Ozempic and Wegovy users compared to 0.8-1.8% for other drugs.
Despite these concerns and competition, Novo Nordisk is in a good position to expand in the future. The stock is a buy due to its positive financial outlook, strategic ambitions, and strong historical performance. Its position as a top healthcare company is cemented by its disruption of the diet industry and ongoing innovation in the treatment of diabetes.
4. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Investors: 63
Revenue Growth Rate (year-over-year): 7.09%
A leading provider of biologic medicines, Amgen Inc. (NASDAQ:AMGN) has lately become a major force in the GLP-1 weight loss drug market. Over the past 12 months, the company’s stock has increased by more than 47%. This remarkable achievement follows a robust earnings report from AMGN in early May, when the company reported non-GAAP EPS of $3.96, beyond Wall Street estimates, and generated sales of $7.45 billion, up 22% over the same period the previous year.
Amgen’s first-quarter earnings showed strong growth, fueled by important medications including Epogen, Aranesp, and Repatha. The business increased its projection for FY 2024 operating EPS to between $19 and $20.20 and expects sales between $32.5 billion to $33.8 billion. These numbers point to a promising future for Amgen.
Amgen is making progress in the GLP-1 market with its obesity portfolio, which includes the intriguing AMG 133 and MariTide. These drugs have the potential to rival well-known brands like Wegovy and Ozempic. However, concerns include slower sales of legacy pharmaceuticals such as Enbrel, as well as possible threats from new product releases and clinical studies.
Carillon Eagle Growth & Income Fund stated the following regarding Amgen Inc. (NASDAQ:AMGN) in its first quarter 2024 investor letter:
“Amgen Inc. (NASDAQ:AMGN) shares suffered after the company released detailed clinical data on the lead obesity drug in its pipeline. Although investors recognized the medication’s efficacy, there were some concerns regarding other aspects of the medication revealed by the data.”
Despite concerns, analysts hold a consensus Buy rating on AMGN. In the first quarter of 2024, there were 63 hedge funds for Amgen Inc. (NASDAQ:AMGN) in IM’s database. The company’s biggest shareholder is John Zaro’s Bourgeon Capital with 54,254 shares worth $16.95 million.
In conclusion, it is pertinent to note that the strong earnings growth and a compelling GLP-1 market launch make Amgen a compelling investing opportunity. Given the growth prospects, investors wishing to increase exposure to a leading biotech company with significant future potential can consider AMGN.
3. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Investors: 63
Revenue Growth Rate (year-over-year): 7.76%
Leading biotechnology company Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) uses data insights from the Regeneron Genetics Center and patented technologies like VelociSuite to create novel treatments for serious diseases. They concentrate on conditions related to the eyes, allergies, inflammation, cancer, heart, metabolism, nervous system, hematologic, transmissible, and rare disorders. With an emphasis on maintaining lean mass and decreasing fat mass, the firm is making significant progress in the obesity industry.
A Phase II study for REGN muscle-conserving antibodies is scheduled for mid-2024 as the company prepares to join the enormously profitable obesity market. According to the former CEO George Yancopoulos of REGN, the company’s novel strategy seeks to address the notable muscle loss linked to GLP-1 agonists, which can contribute to over 40% of patients’ weight reduction. Serious public health concerns are raised by this possibly catastrophic and irretrievable risk of muscular atrophy.
Regeneron’s approach combines incretin-based treatments such as tirzepatide and semaglutide with two monoclonal antibodies, trevogrumab and garetosmab. Trevogrumab attaches to activin A, another important factor in muscle atrophy, whereas garetosmab binds to myostatin, a negative regulator of skeletal muscle. Regeneron hopes to enhance the quality of weight reduction in individuals using GLP-1 receptor agonists by obstructing these pathways and maintaining lean muscle mass.
In mid-2024, the company intends to sign up obese patients in the Phase II investigation, subject to the outcome of a safety and tolerability study conducted on healthy volunteers with high-dose trevogrumab. With this strategy, Regeneron may now compete with industry giants, whose obesity therapies similarly target muscle atrophy.
Regeneron Pharmaceuticals (NASDAQ: REGN) has seen a difficult start to 2024, missing sales and EPS projections in the first quarter and getting two comprehensive response letters for odronextamab from the FDA. Notwithstanding these obstacles, Eylea fared well due to the introduction of Eylea HD and the important growth products, Libtayo and Dupixent.
REGN is one of the Best GLP-1 and Weight Loss Stocks to Buy Now. Analysts hold a consensus Buy recommendation on shares. As of the end of the first quarter of 2024, 63 hedge funds out of the 920 funds reported having stakes in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN). D E Shaw is the top shareholder with a stake worth $221.83 million.
Regeneron’s stock may rise significantly if the company’s Phase II study for its muscle-preserving antibodies is successful. Risk-tolerant investors can consider doing their due diligence on REGN.
2. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Investors: 77
Pfizer Inc. (NYSE:PFE) is a global company that finds, develops, produces, promotes, distributes, and sells biopharmaceutical pharmaceuticals in Europe and the US.
Pfizer Inc. (NYSE:PFE) recently confirmed that it will proceed with the development of danuglipron, an oral tablet that acts as a GLP-1 agonist and is used to treat weight reduction. This action is a result of the twice-daily formulation’s Phase 2 trial meeting effectiveness targets despite a high rate of patient withdrawals owing to adverse effects.
A notable improvement is that there is no indication of liver damage with the once-daily form of danuglipron. Pfizer is still lagging behind the two market leaders, which have drugs like Zepbound and Wegovy dominating the weight loss market. Pfizer’s new formulation strives to meet obesity’s common medical demands, but it is up against numerous other candidates in clinical trials.
Pfizer reported $14.9 billion in revenue in the first quarter of 2024, a 19% decrease from the previous year. Adjusted EPS was $0.82, whereas reported EPS was $0.55. The company’s other revenues increased by 11%, while COVID-related revenue decreased. Only over $1 billion of Pfizer’s revenue came from its massive M&A activity in Q1 2024, which included purchases worth close to $70 billion. The company estimates that over time, M&A will bring in $25 billion, while newly introduced items will bring in $20 billion.
Pfizer’s weight loss pill portfolio is being expanded in the competitive GLP-1 market by studying two other pills along with danuglipron. Over time, the launch of these therapies may have an effect on key market players’ revenue growth. Tirzepatide (Mounjaro and Zepbound) and Semaglutide (Ozempic and Wegovy), which are now dominating the weight loss market, have established high standards, with tirzepatide demonstrating a mean weight reduction of around 21% and semaglutide ~15%. Danuglipron, marketed by Pfizer, comes up against competition from existing competitors as well as firms that are creating GLP-1 agonists.
As per analysts, PFE has a consensus Buy rating. In the first quarter of 2024, 77 hedge funds out of 920 reported holding a stake in Pfizer Inc. (NYSE:PFE). Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners is the largest shareholder in the company, with 102,788 shares worth $66.995 million.
In summary, Pfizer is still a distant rival in the crowded GLP-1 market, despite its encouraging focus on a once-daily danuglipron formulation. Compared to its weight loss medication endeavors, the company’s large M&A moves and its encouraging pipeline may present more dependable growth paths.
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Investors: 109
Eli Lilly, a leading obesity medicine manufacturer and one of the top insulin producers, is involved in the drug manufacturing industry. The company is involved in the discovery, development, manufacturing, and marketing of pharmaceutical products for human use. It makes therapies for obesity, diabetes, and cardiometabolism.
With its weight loss medications being a major factor, Eli Lilly and Company (NYSE: LLY) has had one of the most impressive rises in recent years. The stock has shot up by more than 79% over the past 12 months. FDA-approved Tirzepatide, the GLP-1 receptor agonist marketed under the names Zepbound for managing weight and Mounjaro for diabetes, is largely responsible for this rise.
Tirzepatide received approval for long-term weight control on July 19th from the National Medical Products Administration in China. This comes after the European Union approved weight control and Type 2 diabetes in April 2024. Eli Lilly’s market penetration outside of the US, where it made up 63.9% of its sales in 2023, has increased dramatically as a result of these approvals.
Since 2004, China’s adult obesity rate has risen by 14.1%, with 34.8% of the population being overweight. Overweight or obese adults make up 52.7% of the adult population in the European Union. Consequently, there are market opportunities for Eli Lilly and Company (NYSE:LLY).
Here’s what management had to say about Mounjaro and Zepbound during the Q1 2024 earnings call:
“Lilly’s first quarter performance reflects solid year-over-year revenue growth with strong sales of Mounjaro and Zepbound,” said David A. Ricks, Lilly’s chair and CEO. “Our progress in addressing some of the world’s most significant health care challenges has resulted in increased demand for our medicines. As we continue to make pipeline investments that position us for future growth, we are rapidly expanding manufacturing capacity to make our incretin medicines available to more patients.”
LLY has demonstrated robust financial performance overall driven by strong sales of FDA-approved obesity medications. The company has $2.59 billion in cash and cash equivalents, which is ample to fund growth.
Eli Lilly is currently facing a serious supply shortage as a result of its inability to construct enough facilities to produce enough dosages to meet the rapidly increasing demand. According to the U.S. FDA, there will be a scarcity of Zepbound and Mounjaro dosages through Q2 2024. Despite this, a solid portfolio of current drugs and a promising R&D pipeline make LLY one of the best GLP-1 and weight loss stocks to buy now.
Eli Lilly’s obesity treatments are part of a family of drugs called GLP-1 agonists that were first created for the treatment of diabetes. Patients who take these medications can lose up to 20% of their body weight on average. Tema ETF investing associate David Song stated, “I would say Lilly’s doing a good job in trying to address the situation. There’s a lot of demand for these… therapies.” Furthermore, Lilly and its primary competitor are striving to present clinical proof that their GLP-1 drugs offer health advantages beyond diabetes and weight loss, as well as heart-protective capabilities that may increase insurance coverage.
Analysts are bullish on the stock and rate it as a Strong Buy. In the first quarter of 2024, 109 hedge funds out of 920 reported holding an ownership stake. Joe Dimenna’s ZWEIG DIMENNA PARTNERS is the largest stakeholder in the company, with 19,680 shares worth $17.82 million.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its first quarter 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company that discovers, develops, manufactures, and sells medicines in the categories of diabetes, oncology, neuroscience, and immunology, among other areas. Stock performance was strong due to robust fourth quarter sales of Mounjaro/ Zepbound, better-than-anticipated initial guidance for fiscal year 2024, and ongoing enthusiasm surrounding the company’s obesity and diabetes franchises. We continue to think Lilly is well positioned to grow revenue and earnings at attractive rates through the end of the decade and beyond.”
In conclusion, tirzepatide’s introduction by Eli Lilly into China and the European Union has created new opportunities for the company. On the other hand, investors might want to wait and see until the forthcoming financial reports, given the supply issues.
While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
