Investor interest in GLP-1 drugs, such as Novo Nordisk's Ozempic and Wegovy, may see a resurgence in 2025, driven by increased supply and the potential launch of new, more powerful weight-loss drugs, according to Barclays analysts. This renewed focus follows a period of waning enthusiasm in 2024 due to supply constraints of Novo Nordisk's drugs.
Catalent Acquisition to Boost Supply
The Federal Trade Commission's approval of Novo Nordisk's $16.5 billion acquisition of Catalent is expected to significantly expand the Danish drugmaker's production capacity. This acquisition grants Novo Nordisk access to three additional manufacturing facilities, enabling it to meet the current high demand for GLP-1 agonists and increase revenue. Barclays analysts anticipate that this expanded capacity will alleviate supply restrictions that have dampened investor interest in 2024.
Potential Launch of CagriSema
The completion of Novo Nordisk's REDEFINE-1 study could pave the way for a new generation of weight-loss drugs. A positive outcome in the Phase III trial of CagriSema, Novo Nordisk's experimental drug, would provide a competitive advantage over Eli Lilly's Zepbound and help protect Novo Nordisk's revenue following the expiration of its semaglutide patent in 2032. CagriSema is poised to potentially offer even greater efficacy than existing GLP-1 drugs.
Broader Market Impact
Barclays analysts suggest that increased GLP-1 drug usage could negatively impact the alcoholic beverage industry. They point out that while a direct correlation between GLP-1 drug consumption and recreational alcohol consumption has not been measured, it is reasonable to expect a potential decline in alcohol sales. Companies with high exposure to the U.S. alcohol market, such as Molson Coors, Constellation Brands, and Brown-Forman, may be affected.
Conversely, retailers like Walmart, whose pharmacies sell GLP-1 drugs, could benefit from increased sales. Walmart estimates an incremental $1 billion per quarter sales boost. Danone's portfolio is also well-positioned to profit from the rise in GLP-1 consumption, given its focus on health-conscious consumers.
Semaglutide versus Alzheimer's disease
In the second half of the year, another study is due that tests semaglutide versus Alzheimer's disease.
