12 Best Weight Loss Stocks to Buy According to Hedge Funds

In this article, we will be taking a look at the 12 best weight loss stocks to buy according to hedge funds.

The Revolution in Obesity Treatment: Opportunities and Challenges of GLP-1 Medications

Most people have at some point sought to include weight loss and physical exercise in their daily life. The weight loss and fitness market is quite substantial worldwide since improving one’s fitness can have direct physical and psychological benefits. Over one billion people worldwide—650 million adults, 340 million adolescents, and 39 million children—are obese, according to the WHO. A novel class of weight-loss medications that don’t include strict exercise regimens or diets seems to be revolutionary. People who are overweight or obese can lose 15% to 20% of their body weight with the aid of these ground-breaking medications. According to Andy Acker, portfolio manager at Janus Henderson Investors, “This may be the largest opportunity we’ve ever seen in the pharmaceutical industry.” Weight-loss medications are undoubtedly well-liked. Investors are drawing comparisons between the leader in artificial intelligence chips and the US pioneer in weight-loss drugs.

Given this increase in demand, Morgan Stanley Research has raised its forecast for the worldwide obesity medication market from $77 billion to $105 billion by 2030. Branded obesity medications brought approximately $6 billion in 2023.

According to Forbes, the most prescribed Glucagon-Like Peptide-1 GLP-1 agonist in 2023 was Semaglutide, the market leader for obesity medications and the generic form of Ozempic, Wegovy, and Rybelsus. It accounted for almost 88% of all new prescriptions. At present, the FDA has approved just three GLP-1 medications for weight control: tirzepatide, liraglutide, and semaglutide.

By 2030, the GLP-1 market is expected to grow to $100 billion, driven equally by obesity and diabetes, according to JP Morgan Research. Thirty million GLP-1 users, or around 9% of the population, may be in the US by 2030. The rising demand for obesity drugs will have a broad effect, helping industries like biotech but creating challenges for others like the food and beverage industry.

According to Chris Schott, a Senior Analyst specializing in the U.S. Diversified Biopharma industry,

“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.”

Some are praising the most recent generation of GLP-1 pharmaceuticals as “miracle drugs” for the treatment of obesity. However, because GLP-1s are expensive and have limited insurance coverage, not all obese people can use them. According to Jonathan Gruber, a professor of economics and the chairman of MIT’s economics department, the annual cost of treating 40% of obese Americans at the current rate—roughly $15,000 per person—would surpass $1 trillion. That’s almost the same as the government spends on the entire Medicare program. That’s a staggering figure.

GLP-1 Medications: Balancing Rising Demand, Shortages, and Market Potential

According to a study released in the Annals of Internal Medicine, the use of GLP-1 medications, including semaglutide, for weight loss has increased over the last ten years, while it has dropped by about 10% among those with type 2 diabetes. The researchers warn that the ensuing extended drug scarcity may limit the treatments’ availability to diabetics. Dr. Yee Hui Yeo, a clinical fellow in Cedars-Sina’s Karsh Division of Gastroenterology and Hepatology, emphasized that it is crucial to ensure that diabetic patients have access to GLP-1 therapies as the demand for obesity medications increases.

According to the FDA, growing demand is the cause of the shortages. The European Medicines Agency warned that the GLP-1 medicine shortage is a “major public health concern” that is unlikely to be resolved in 2024, indicating that the shortages affect more than only the US. According to NPR, shortages have made it difficult for those with diabetes to get their prescriptions, and some have had to reduce the medications they can use.

The potential of GLP-1 medications, which were first created to treat diabetes but are currently being used to treat obesity, was covered by the panelists on “Weighing the Future of Obesity Drugs,” which included Julia Angeles of Baillie Gifford, Debra Netschert of Jennison Investments, and Gentry Lee of Fayez Serofim. Netschert highlighted ongoing efforts to further reduce injection frequency and minimize adverse responses, as well as the development of GLP-1 medicine delivery from weekly dosages to multiple daily injections. Despite their exceptional efficacy, Netschert noted that due to supply limits, 1.5 million of the 110 million eligible patients in the US are now receiving therapy with GLP-1 medications. In their disagreement over who should foot the bill, Netschert pointed to significant insurance and Medicare/Medicaid reimbursements, while Angeles asserted that most patients pay cash. According to Netschert, up to 700 million people globally might require these medications outside of American borders. Notably, the panel found that GLP-1 medications were approved more quickly in the United Kingdom than in any other country, indicating their perceived value. The UK payors are generally stringent.

Since the market for obesity medications is still in its infancy, it would be a good idea to add several weight reduction stocks to your watchlists.

Our Methodology 

For this list, we scanned through holdings of weight loss ETFs and online rankings to form an initial list of 20 weight loss stocks. From that list, we picked 12 stocks with the highest number of hedge fund holders as of Q3 2024, based on data tracked by the Insider Monkey database. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them.

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).

Here is our list of the 12 best weight loss stocks to buy according to hedge funds. 

12. Terns Pharmaceuticals, Inc. (NASDAQ:TERN)

Number of Hedge Fund Holders: 39 

Terns Pharmaceuticals, Inc. (NASDAQ:TERN) is a clinical-stage biopharmaceutical company developing small-molecule drugs for serious diseases like cancer, obesity, and metabolic disorders. Its key drug candidates include TERN-701 for chronic myeloid leukemia, TERN-601 for obesity, and TERN-501 for metabolic dysfunction-associated steatohepatitis.

Terns Pharmaceuticals, Inc. (NASDAQ:TERN) has made substantial strides with its experimental oral GLP-1R agonist, TERN-601. In a recent Phase 1 clinical trial, TERN-601 demonstrated statistically significant weight loss, with participants receiving the highest dose (740 mg) experiencing a mean weight loss of nearly 5% over 28 days, compared to less than 1% for the placebo group. The positive trial results for TERN-601 have boosted the company’s stock price which positions it as a strong oral alternative to injectable obesity treatments from Novo Nordisk and Eli Lilly. Analysts from BMO Capital Markets have praised the data, highlighting TERN-601’s once-daily dosing regimen as a potential competitive advantage.

As of Q3 2024, 39 hedge fund holders held shares in the company, as tracked by the Insider Monkey database. The largest shareholder in the company was OrbiMed Advisors with shares worth $63.7 million. Terns Pharmaceuticals, Inc. (NASDAQ:TERN) has received a consensus Strong Buy rating from Wall Street analysts. The average price target is $18.92, with a high forecast of $30.00 and a low forecast of $7.50. This average target reflects a potential 173.41% increase from the current price of $6.92.

11. Structure Therapeutics Inc. (NASDAQ:GPCR)

Number of Hedge Fund Holders: 40 

Structure Therapeutics Inc. (NASDAQ:GPCR) is a clinical-stage biopharmaceutical company developing oral small-molecule drugs for chronic diseases like obesity, type-2 diabetes, and cardiopulmonary conditions. Its lead product candidate, GSBR-1290, targets type-2 diabetes and obesity, while other pipeline candidates focus on idiopathic pulmonary fibrosis and other pulmonary diseases. The company’s drugs are designed to be more accessible and convenient than traditional injectable therapies. Its target market includes patients seeking effective treatments for chronic conditions.

Structure Therapeutics Inc. (NASDAQ:GPCR), considered one of the best weight loss stocks, is advancing its oral GLP-1 receptor agonist, GSBR-1290, through Phase 2b studies, with the Phase 2 ACCESS II study set to begin by the end of 2024. These studies aim to assess GSBR-1290’s efficacy and safety in treating obesity and overweight adults. The corporation is also developing other candidates, including amylin receptor agonists, GIPR selective agonists, and GLP-1R/GIPR combinations, along with ANPA-0073 for weight loss and idiopathic pulmonary fibrosis.

As of Q3 2024, Structure Therapeutics Inc. (NASDAQ:GPCR) had $915.3 million in cash and investments, sufficient to fund operations and key milestones through 2027, excluding Phase 3 studies. Research and development expenses rose to $32.6 million, up from $17.5 million in Q3 2023 which was driven by program advancements and increased personnel. General and administrative expenses increased to $13.2 million from $8.6 million due to higher employee and professional service costs. The company also reported a net loss of $34.0 million, compared to $23.9 million in Q3 2023, including a $6.0 million non-cash share-based compensation expense.

Wall Street analysts hold a consensus Strong Buy rating on the stock, with an average 12-month price target of $88.88. The price target range includes a high forecast of $118.00 and a low of $65.00. The average target represents a 156.18% increase from the current price of $34.70.

10. Viking Therapeutics, Inc. (NASDAQ:VKTX)

Number of Hedge Fund Holders: 41 

Viking Therapeutics, Inc. (NASDAQ:VKTX) is a clinical-stage biopharmaceutical company developing therapies for metabolic and endocrine disorders. Its key products include VK2809 which is a thyroid hormone receptor beta agonist for lipid and metabolic disorders like NASH and NAFLD, and VK2735 which is a dual agonist for obesity and metabolic disorders. The company is also developing VK0214, a thyroid hormone receptor beta agonist for X-linked adrenoleukodystrophy (X-ALD). Viking Therapeutics, Inc. (NASDAQ:VKTX) targets patients with obesity, liver diseases, and rare genetic conditions, planning to distribute its products through pharmaceutical channels once approved.

In the third quarter of 2024, the company reported a net loss of $24.9 million, or $0.22 per share, an increase from the same period in 2023. This rise in losses was mainly due to higher research and development (R&D) and general and administrative (G&A) expenses. For the nine months ending September 30, 2024, the net loss totaled $74.5 million, or $0.69 per share, driven by similar factors.

R&D expenses increased to $22.8 million in Q3 2024 from $18.4 million in Q3 2023, due to higher costs in drug manufacturing, salaries, benefits, and regulatory services. G&A expenses rose to $13.8 million from $8.9 million, largely driven by stock-based compensation, legal and patent services, and third-party consultancy.

Despite these higher expenses, Viking Therapeutics, Inc. (NASDAQ:VKTX) significantly improved its financial position, with cash holdings of $930 million as of September 2024, up from $362 million at the end of 2023. This boost in cash reserves will support ongoing and future clinical trials.

As of Q3 2024, 41 hedge funds held shares in the company, as tracked by the Insider Monkey database. The largest shareholder in the company was Artia Global Partners with shares worth $33.7 million. Viking Therapeutics, Inc. (NASDAQ:VKTX) has received a consensus Strong Buy rating from analysts, with a 12-month price target average of $115.80. The price target range spans from a low of $95.00 to a high of $164.00. The average target represents a 142.01% increase from the current price of $47.85.

9. AstraZeneca PLC (NASDAQ:AZN)

Number of Hedge Fund Holders: 42 

AstraZeneca PLC (NASDAQ:AZN) is a British-Swedish multinational biopharmaceutical company specializing in developing and manufacturing treatments for diseases such as cancer, respiratory conditions, cardiovascular issues, and autoimmune disorders. Its product portfolio includes biologics, vaccines, and prescription drugs like Tagrisso for lung cancer, Farxiga for diabetes and heart failure, and Symbicort for asthma and COPD. The company is among the largest pharmaceutical companies worldwide. 

AstraZeneca PLC (NASDAQ:AZN) is advancing in the weight loss and obesity treatment market with innovative drug candidates. AZD5004, an oral GLP-1 receptor agonist licensed from Eccogene, offers a convenient alternative to injectables. Phase I trials demonstrated safety at lower doses, with patients experiencing 5.8% weight loss and improved glucose levels. Now entering Phase IIb trials, AZD5004 is expected to generate $800 million in sales by 2032 due to its favorable tolerability and simplified manufacturing. These developments make AZN one of the best weight loss stocks on our list.

AZD6234, a long-acting amylin receptor agonist, targets gastric emptying and appetite suppression, catering to patients intolerant to GLP-1 therapies. Phase I results showed weight loss with manageable side effects. The corporation is exploring its use in combination with AZD9550, a GLP-1/glucagon dual agonist, to enable once-weekly dosing and fat-selective weight loss, enhancing patient convenience and treatment efficacy. By developing oral treatments and combination therapies, AstraZeneca PLC (NASDAQ:AZN) aims to broaden its market presence and meet diverse patient needs in obesity care.

As of Q3 2024, 42 hedge funds held shares in the company as tracked by the Insider Monkey database. The largest shareholder in the company was Fisher Asset Management with holdings worth $816.5 million. Analysts hold a consensus Strong Buy rating on the stock.

8. Biohaven Ltd. (NYSE:BHVN)

Number of Hedge Fund Holders: 42 

Biohaven Ltd. (NYSE:BHVN) is a clinical-stage biopharmaceutical company developing innovative treatments for neurological, immunological, and oncological diseases. Its pipeline includes drugs for conditions like epilepsy, migraines, OCD, SMA, obesity, and cancer. Key drug candidates are BHV-7000 (Kv7 activator), Troriluzole (tripeptide prodrug), and Taldefgrobep (HV-2000) for obesity.

Biohaven Ltd. (NYSE:BHVN) is developing taldefgrobep alfa, which is a myostatin inhibitor targeting obesity through a unique mechanism that increases lean muscle mass and resting metabolism. It stands eighth on our list of the best weight loss stocks. Unlike GLP-1 agonists, which often reduce both fat and muscle, taldefgrobep promotes fat loss while preserving and enhancing lean mass. Preclinical and early human trials show significant fat reduction (11% in mice) and a 25% increase in lean muscle. Additional benefits include improved metabolic health, with lower insulin and leptin levels observed in treated mice. Taldefgrobep has demonstrated a favorable safety profile, with no serious adverse events in over 500 patients in prior SMA trials.

In the third quarter of 2024, Biohaven Ltd. (NYSE:BHVN) reported a net loss of $160.3 million ($1.70 per share), an increase from the net loss of $102.6 million ($1.50 per share) in the same period in 2023. The non-GAAP adjusted net loss was $164.1 million ($1.74 per share), up from $98.1 million ($1.44 per share) in Q3 2023. This increase in net loss was primarily attributed to higher research and development (R&D) and general and administrative (G&A) expenses.

Biohaven Ltd. (NYSE:BHVN)’s R&D expenses rose significantly to $157.6 million, up from $95.5 million in Q3 2023, due to ongoing clinical trials and preclinical research. Additionally, G&A expenses increased to $20.6 million from $15.0 million in the same period last year, reflecting higher share-based compensation. Despite these challenges, the company saw an improvement in other income, which surged to $17.8 million from $4.7 million in Q3 2023. This increase was largely driven by changes in the fair value of derivative liabilities and higher investment income.

Analysts hold a consensus Strong Buy rating on the stock and as of Q3 2024, 42 hedge funds held shares in the company.

7. Dexcom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders: 55 

DexCom, Inc. (NASDAQ:DXCM) is one of the best weight loss stocks to buy according to hedge funds. It designs and develops continuous glucose monitoring (CGM) systems to help people with diabetes manage their blood glucose levels. The company produces products like the Dexcom G6 and G7 CGM systems, Dexcom Share remote monitoring, and related software and mobile apps. Their core products include disposable glucose sensors and reusable hardware such as transmitters and receivers.

In Q3 2024, DexCom, Inc. (NASDAQ:DXCM) reported $994 million in revenue which reflects a 2% increase year-over-year. U.S. revenue was down 2%, while international revenue grew 12%. Gross profit was $625.9 million, slightly down from last year, and operating income was $212 million. The company ended the quarter with $2.5 billion in cash and launched a $750 million share repurchase program.

The launch of Stelo, a glucose monitoring product for individuals with prediabetes or Type 2 diabetes not on insulin, is key to the company’s expansion into the metabolic health market. Stelo has gained positive early feedback, with many customers subscribing to its service. DexCom, Inc. (NASDAQ:DXCM) has expanded Stelo’s distribution through partnerships and B2B sales to clinicians.

The corporation’s international growth continues, with DexCom’s G7 and Dexcom ONE+ reaching new markets like Australia and France, significantly expanding the company’s global reach. DexCom, Inc. (NASDAQ:DXCM) remains a leader in the growing global CGM and metabolic health markets.

Analysts hold a consensus Strong Buy rating on the stock. As of Q3 2024, 55 hedge funds held shares in the company, as tracked by the Insider Monkey database. The largest shareholder in the company was D E Shaw with holdings worth $162.8 million.

6. Novo Nordisk A/S (NYSE:NVO)

Number of Hedge Fund Holders: 61 

Novo Nordisk A/S (NYSE:NVO), founded in 1923 and based in Denmark, is a global healthcare company focused on discovering, developing, manufacturing, and marketing pharmaceutical products. Its primary areas of focus include diabetes care, obesity treatment, hemophilia management, growth hormone therapy, and hormone replacement therapy. The company’s key products include insulin brands (NovoLog/NovoRapid), GLP-1 medications (Ozempic, Wegovy), hemophilia treatments (NovoSeven), and growth hormone therapies (Norditropin).

Novo Nordisk A/S (NYSE:NVO) is developing an oral weight loss pill called amycretin, which targets both amylin and GLP-1 receptors to regulate hunger and blood sugar. In Phase 1 trials, amycretin led to up to 13% body weight loss over 12 weeks, with mild gastrointestinal side effects. Other weight loss treatments in development include CagriSema, which helped patients lose 17% of their body weight in trials, and oral semaglutide as an alternative to injectable Wegovy.

In Q3 2024, Novo Nordisk A/S (NYSE:NVO) reported strong financial performance, with a 24% increase in total sales and a 22% rise in operating profit at constant exchange rates. GLP-1 sales, including diabetes and obesity treatments, grew by 26%, with North America seeing a 32% increase and international operations growing by 16%. Sales in obesity care surged by 44%, driven by a 77% global increase in Wegovy sales, including a 50% growth in North America and a 95% increase in international markets.

The obesity treatment market is competitive, with Eli Lilly’s Zepbound and tirzepatide as major rivals. Novo Nordisk A/S (NYSE:NVO) is investing in manufacturing to meet growing demand, particularly for Wegovy. The company plans larger studies to assess the long-term efficacy and safety of its treatments, with a broader focus on improving overall health and addressing comorbidities like hypertension and heart disease. The stock currently holds a Moderate Buy rating.

5. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)

Number of Hedge Fund Holders: 62 

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is involved in the discovery, development, manufacturing, and marketing of medicines for serious medical conditions such as cancer, eye diseases, allergies, inflammation, and rare diseases. Its key products include Eylea for retinal diseases, Dupixent for immunological disorders, and Libtayo for cancer treatment. The company has over 35 candidates in its development pipeline.

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is developing two monoclonal antibodies, Trevogrumab, and Garetosmab, to preserve lean muscle mass during weight loss, in combination with incretin-based treatments like Semaglutide (Wegovy) and Trzepatide. Trevogrumab inhibits myostatin, promoting muscle growth, while Garetosmab targets activin A to prevent muscle deterioration. These antibodies aim to reduce muscle loss, which can make up to 40% of total weight loss, thus improving long-term health outcomes. The corporation is also addressing post-treatment weight maintenance by combining these antibodies with existing weight loss drugs to promote sustainable weight loss and healthier body composition which places Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) among the best weight loss stocks.

Additionally, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is collaborating with AstraZeneca to develop small molecule drugs targeting the GPR75 gene, associated with lower obesity risk, aiming for patient-friendly oral treatments. Their Genetics Center has uncovered genetic mutations, such as in GPR75, that protect against obesity, leading to new therapeutic avenues for obesity treatments, including antibody, small molecule, and gene silencing approaches.

In Q3 2024, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) reported strong financial results with total revenue growing by 11% to $3.72 billion, exceeding expectations. Key drivers included Dupixent, which saw a 23% rise in sales to $3.82 billion, and Libtayo, which grew by 24%. R&D expenses increased by 18%, signaling the company’s focus on expanding its pipeline, including obesity treatments. The company’s net income rose by 33%, with GAAP EPS increasing by 30% which reflects strong operational performance.

4. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 68 

Amgen Inc. (NASDAQ:AMGN) is a biotechnology company that develops innovative human medicines for serious diseases, including cancer, cardiovascular conditions, and neurological disorders. It produces biological therapies like Neupogen, Neulasta, Epogen, and Enbrel. Recently, the company has expanded into the GLP-1 weight loss market with drugs such as MariTide and AMG 133, focusing on advancing treatments for weight management.

Amgen Inc. (NASDAQ:AMGN)’s MariTide activates the GLP-1 hormone, promoting fullness, while blocking the GIP hormone, which regulates fat storage and metabolism. Unlike other weight loss medications, MariTide is administered once a month via subcutaneous injection, improving convenience and patient compliance. In clinical trials, MariTide showed promising results. In Phase 1, participants lost an average of 14.5% of their body weight over 12 weeks. In Phase 2, non-diabetic participants lost up to 20% of their weight, while those with Type 2 diabetes lost up to 17% and saw significant improvements in glycemic control.

In the third quarter of 2024, Amgen Inc. (NASDAQ:AMGN) reported a 23% increase in total revenues, reaching $8.5 billion, driven by strong product sales growth, particularly from Tezspire, which saw a 67% increase, and Repatha, which grew by 40%. The corporation achieved an operating margin of 49.6%, demonstrating efficient management despite rising operational costs. Free cash flow totaled $3.3 billion, while R&D spending rose by 35% to $1.4 billion. SG&A expenses increased by 21% year-over-year, and the non-GAAP tax rate dropped to 13.4% which reflected favorable changes in the earnings mix. Additionally, Amgen Inc. (NASDAQ:AMGN) retired $2.5 billion in debt, strengthening its balance sheet and financial position.

3. Bristol-Myers Squibb Company (NYSE:BMY)

Number of Hedge Fund Holders: 70 

Bristol-Myers Squibb Company (NYSE:BMY), a leading biopharmaceutical company headquartered in Princeton, New Jersey, specializes in innovative treatments for oncology, cardiovascular diseases, immunology, and fibrotic conditions. The company has also explored weight loss through its diabetes medications, which show potential in managing obesity alongside type 2 diabetes. It’s Exenatide (Byetta and Bydureon), a GLP-1 receptor agonist, has demonstrated modest weight loss benefits, with a 2.7% BMI reduction observed in obese adolescents during clinical trials.

Bristol-Myers Squibb Company (NYSE:BMY)’s Metformin, which is widely used for blood sugar control, aids weight management by activating hunger-reducing pathways. Similarly, Dapagliflozin, developed in collaboration with AstraZeneca, supports weight reduction by increasing glucose excretion through the kidneys. These therapies reflect a broader trend in using diabetes medications for weight management, paralleling emerging drugs like Semaglutide and Tirzepatide, which achieve significant weight loss of up to 14.9% and 20.9%, respectively. This dual action of addressing metabolic disorders and promoting weight loss underscores the growing role of diabetes drugs in combating obesity.

In Q3 2024, Bristol-Myers Squibb Company (NYSE:BMY) reported total revenues of $11.9 billion, an 8% year-over-year increase (+10% adjusted for foreign exchange) which was driven by the Growth Portfolio, which generated $5.8 billion, marking an 18% growth (+20% adjusted for foreign exchange). Key financial metrics include a GAAP EPS of $0.60 (down from $0.93 in Q3 2023) and a non-GAAP EPS of $1.80 (compared to $2.00 a year earlier). Gross margins decreased to 75.1% from 77.1% due to changes in the product mix, and R&D expenses rose by 6% to $2.4 billion, reflecting recent acquisitions and ongoing clinical trials.

Bristol-Myers Squibb Company (NYSE:BMY) raised its 2024 revenue guidance to approximately 5% growth, with a revised non-GAAP EPS range of $0.75–$0.95. Increased demand for key products like Eliquis and new therapies within the Growth Portfolio largely contributed to the revenue boost. Additionally, the corporation achieved U.S. approval for Cobenfy, a novel treatment for schizophrenia that may also impact metabolic health, indirectly influencing weight management through improved mental health outcomes.

As of Q3 2024, 70 hedge funds held shares in the company with Pzena Investment Management being the largest shareholder with shares worth $734.7 million, as tracked by the Insider Monkey database.

2. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 80 

Pfizer Inc. (NYSE:PFE) is a leading pharmaceutical company founded in 1849 and headquartered in New York City. It manufactures and markets a wide range of healthcare products, including medicines and vaccines. Pfizer is advancing its focus on obesity treatment with the development of danuglipron, an oral glucagon-like peptide-1 (GLP-1) receptor agonist. Danuglipron mimics the GLP-1 hormone to regulate appetite and glucose metabolism, promoting weight loss by signaling fullness to the brain, increasing insulin secretion, and slowing gastric emptying.  Earlier trials of a twice-daily formulation showed up to 13% body weight reduction over 32 weeks but faced high dropout rates due to side effects like nausea and vomiting.

Pfizer Inc. (NYSE:PFE) enters the weight loss market to compete with well-known injectable GLP-1 drugs such as Ozempic and Wegovy from Novo Nordisk. The oral version of danuglipron may solve injection-related usability issues and provide a more practical choice in the expanding market for obesity treatment.

In Q3 2024, the company reported $17.7 billion in revenues, a 31% increase from Q3 2023 which was driven by strong oncology product performance and demand for Paxlovid during a COVID-19 wave. Excluding Paxlovid and Comirnaty, revenues still grew 14%, showcasing the strength of Pfizer Inc. (NYSE:PFE)’s non-COVID portfolio. The company reported a net income of $4.5 billion, reversing a $2.4 billion loss from the previous year. Reported diluted EPS rose to $0.78 from a loss of $0.42, and adjusted diluted EPS improved to $1.06 from a loss of $0.17.

Pfizer Inc. (NYSE:PFE) raised its 2024 revenue guidance to $61.0–$64.0 billion and adjusted diluted EPS guidance to $2.75–$2.95, reflecting confidence in its product performance and strategic initiatives.

Analysts hold a consensus Moderate Buy rating on the stock and as of Q3 2024, 80 hedge funds held shares in the company, as tracked by the Insider Monkey database. Out of these 80, the largest shareholder was Citadel Investment Group with holdings worth $718.4 million.

1. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 86 

Merck & Co., Inc. (NYSE:MRK), known as MSD outside the U.S. and Canada, is a global biopharmaceutical leader addressing obesity and weight loss through innovative and multifaceted strategies. In 2013, the company launched HMR Weight Management Services, which provides evidence-based programs that integrate structured diets, behavior coaching, monitoring, and physical activity. These programs, available through clinics and a remote option called “Healthy Solutions at Home,” have shown remarkable results. Participants achieved a median weight loss of 28 pounds within 26 weeks, with 60% losing over 10% of their body weight.

In addition to lifestyle programs, Merck & Co., Inc. (NYSE:MRK) is advancing next-generation anti-obesity drugs. The company is developing efinopegdutide, which is a GLP-1 and glucagon receptor activator that offers weight loss benefits alongside improvements in cardiometabolic health. Clinical trials have demonstrated promising outcomes, positioning the corporation as a key player in the burgeoning obesity market.

In Q3 2024, Merck & Co., Inc. (NYSE:MRK) reported $16.7 billion in sales, a 4% increase (7% excluding foreign exchange). GAAP EPS fell to $1.24 (from $1.86) and non-GAAP EPS to $1.57 (from $2.13), impacted by a $0.79 per share charge from business development transactions.

The company’s R&D expenses rose 77% to $5.9 billion which was driven by acquisitions of EyeBio and CN201 (MK-1045). Its revenue growth was led by Keytruda (up 17% to $7.4 billion), strong Animal Health sales (up 6% to $1.5 billion), and contributions from new products like Winrevair and Capvaxive. The stock currently has a consensus Moderate Buy rating from analysts.

Overall, MRK ranks first among the 12 best weight loss stocks to buy according to hedge funds. While we acknowledge the potential of pharmaceutical companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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