The case for Ozempic: the next wonder drug?

29 April 2024

In this article we discuss why Ozempic provides an attractive opportunity for investors, and how its public launch could create ripples across financial markets.

What is Ozempic?

Described by some as a weight loss “wonder drug”, Ozempic has been making headlines recently as more and more celebrities admit they have been using it to lose weight.

Officially, Ozempic is an injectable prescription medicine developed to help people living with type 2 diabetes, which suppresses the appetite to improve blood sugar levels and reduce the risk of major cardiovascular events.

Its parent company, Novo Nordisk, states that Ozempic may help those taking it to lose weight, and they have the results to prove it – the trial of the drug was so successful the FDA permitted Ozempic to stop it early, and make a public launch imminent.

Please be aware that as with all investments, your capital is at risk and you may not receive back the same amount that you invest. This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments.

Impact on the pharmaceutical industry

The global pharmaceutical industry is worth trillions of dollars, and the public launch of a drug like Ozempic could lead to significant shifts in the market.

Beyond significant savings on the costs to treat type 2 diabetes, this could also lead to greater operational efficiencies across the healthcare system. Ozempic also plans to release a pill version of the medicine, which could lead to distribution on a larger scale and more market share.

It is also worth noting that Ozempic is simply the first to achieve success in this industry, and if other pharmaceutical companies develop similar products, this could disrupt the entire industry.

The ripple effect

The impact of Ozempic’s public launch could ripple out even further, causing disruption across multiple industries. For example, how much of a decline would we see in the number of people signing up for gym memberships if an ‘easier’ way to lose weight existed?

Furthermore, how would the effects of Ozempic impact consumer behaviour in the food and beverage industry? Would sales of junk food plummet, and would we see less demand for convenience food like ready meals and takeaways?

Finally, how would this affect alcoholic beverage companies? With an increasing trend towards sobriety and growing market share of low to no alcohol product, would they stay competitive and profitable or be forced to pivot to justify space on retailer’s shelves?

Knowing where to invest next

While it is difficult to predict just how much impact a public launch of Ozempic could have on financial markets, it looks set to shake up the pharmaceutical industry at the very least.

Future Healthcare is one of the themes we monitor under our Thematic Investing approach – we have covered companies like Lonza, who were involved in manufacturing the Moderna COVID-19 vaccine, and Edwards Lifesciences, who specialise in artificial heart valves. Our approach connects you directly to the trends, industries and companies shaping the future.