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MODERN FINANCE O-O-O-Ozempic
MODERN FINANCE O-O-O-Ozempic
By Philip Dudley
No doubt there’s a marketing genius behind the now infamous lyric in those seemingly neverending sing-song commercials— “O-O-O-Ozempic.”
Even more astonishing are the expanding benefits of the transformative drug Semaglutide from Novo Nordisk and Tirzepatide from Eli Lilly, otherwise known as GLP-1s.
Obesity is a worldwide public health problem, with the World Health Organization estimating nearly one billion people are obese. That’s a huge number that presents an immense opportunity for Big Pharma.
The medical cost for the treatment of obesity and related illnesses is 30 to 40 percent higher than for people without obesity and double that for smokers. Think about that for a moment … double the cost of treating smoking related health issues.
The days of gym memberships and fad dieting to lose weight may well be behind us because of the limited success of these drugs. Still, the data shows obesity rates continue to climb, the reason so many are increasingly turning to GLP-1s for salvation.
There’s also the huge possibility of hurting specialty food, fitness and supplement industries, with the main disrupter being synthetic Incretins— hormones produced by the body during digestion. They travel to the brain, which in turn tells the body to produce insulin and the feeling of being full. Definitely sounds like a winning combination.
Originally, the synthetic Incretin, Semaglutide was developed for Type II diabetes and marketed as Ozempic. What patients were finding while taking the drug was that they also were simultaneously losing a significant amount of weight. This spurred many physicians to begin prescribing off label Ozempic for the sole purpose of weight loss. Novo Nordisk seized the opportunity and sought FDA approval for a version of Semaglutide known as Wegovy for weight loss.
About the same time, Eli Lilly was marketing their GLP-1 drug Mounjaro with similar success and soon followed with a weight loss only version called Zepbound.
There are small technical differences between the two company’s drugs, but without a head-to-head study it’s hard to say which one is superior at this moment.
The stock market seems to think Lilly has a better drug based on recent performance, but Novo is not going anywhere anytime soon. What is fact: results show on average a 30 percent weight loss for patients both diabetic and nondiabetic.
While the cost of these drugs is high, that doesn’t seem to be dampening demand because there’s now a worldwide shortage.
Recent announcements from both Novo and Lilly disclosed their plans to spend roughly $6.5 billion respectively to increase global production. That is a large number and still may not satisfy demand.
So what about other potential treatments? There are ongoing clinical trials for Semaglutide for the treatment of serious heart conditions such as heart attack and/or stroke as well as kidney failure, alcoholism and sleep apnea.
These are exciting new frontiers and it’s safe to say we haven’t seen anything like this since “RICOLA!”
