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In what substantially bolsters the veracity of the tagline that the GLP-1 anti-obesity drugs constitute one of the most compelling cases of thematic investing this decade, UBS is out today with a fresh investment note that illustrates the scale of this ongoing paradigm shift in how the healthcare industry deals with the persistent obesity pandemic.
The GLP-1 hormone suppresses hunger and regulates the production of insulin and glucose. After a meal, this hormone raises the level of insulin, which decreases blood glucose levels, and reduces the rate at which the stomach empties its contents into the small intestine, creating a feeling of fullness and satiation in the process. While initially billed as a treatment for diabetes, many of the drugs that utilize GLP-1 agonists are now sold as a dedicated anti-obesity palliative option.
Novo Nordisk (NVO) uses semaglutide as its proprietary GLP-1 agonist in drugs that are marketed under Ozempic and Wegovy labels, with the former geared toward type-2 diabetes and the latter marketed as a treatment for obesity.
Similarly, Eli Lilly and Company (LLY) offers tirzepatide as one of its proprietary drugs to combat diabetes and obesity, marketing it under the Mounjaro and Zepbound labels, with the former geared toward diabetes and the latter billed as a treatment for obesity.
UBS: "We Predict A Duopoly Between Eli Lilly and Novo Nordisk Will Persist, With New Entrants Capturing Less Than 10% Market Share By 2029."
$LLY $NVO | UBS: GLP-1 Obesity Market to Reach $90B by 2029
"We project the GLP-1 obesity market will grow to $90B by 2029, with the combined obesity and diabetes market hitting $150B, reflecting a 33% CAGR from 2023-2029."
"Key drivers include the expansion in obesity…
— Wall St Engine (@wallstengine) July 23, 2024
This brings us to the crux of the matter. UBS has crunched some solid numbers in a new investment note to illustrate the accelerating uptake of the GLP-1 drugs.
The investment giant expects the total GLP-1 market to expand to $150 billion by 2029, with the anti-obesity niche managing to capture a whopping $90 billion of this proverbial pie.
What's more, UBS expects 28 million people on GLP-1 drugs by 2029, which represents around 9 percent of the obese cohort not suffering from type-2 diabetes.
In a striking observation that bodes well for the prospects of Novo Nordisk and Eli Lilly and Company, UBS does not expect their ongoing duopoly to end anytime soon, with the two pharma giants continuing to enjoy a 90 percent GLP-1 market share in 2029.
Oral GLP-1s post Roche's data, summary table from GS. pic.twitter.com/VLL0pRZ38K
— Ohad Hammer (@ohadhammer) July 17, 2024
This prognostication is all the more striking when one considers the scale of the oncoming competition, particularly in the category of oral GLP-1 drugs, which are considered a holy grail of sorts in the pharma industry.
UBS also believes that investors are underestimating the potential of orforglipron, an oral GLP-1 drug from Eli Lilly and Company that is currently undergoing trials:
"We believe the market is underestimating orforglipron's potential, raising our sales forecast to $17B by 2029."
As we reported recently, Goldman Sachs has also significantly increased its projections for the sale of GLP-1 drugs, pegging its estimate of annual global sales of these drugs at $130 billion by 2030.
In fact, financial analysts have already started to downgrade the long-term demand outlook for fast food giants such as McDonald's, based on assumptions that 7 percent of the total population in the US would be using GLP-1 drugs in the next 10 years, with the average caloric consumption of those users declining by around 20 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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