Novo Nordisk's weight loss drug Wegovy has seen a meteoric rise in popularity.
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LONDON – The rapid rise of weight-loss drugs such as Wegovy and Mounjaro is spawning a host of new product lines as companies hope to get on the right side of the healthcare disruptor.
Industries ranging from food and beverage to retail and fitness have been in the spotlight amid growing demand for so-called miracle drugs from Novo Nordisk and Eli Lilly over concerns they could dramatically change drinking habits. the consumers.
However, some companies say they are taking advantage of the new market opportunity.
Dutch bioscience firm DSM Firmenich told CNBC on Wednesday that it is exploring nutritional supplements to complement and offset some of the impacts of weight-loss drugs, with CEO Dimitri de Vreeze describing it as the natural progression for the industry.
“If you lose weight and you're successful, you move into the area of health, nutrition and lifestyle, because you basically want to continue with what you have. That's where we come into play,” de Vreeze told CNBC's “Squawk Box Europe.” “
Weight loss injections, which are based on a group of medications called GLP-1 (glucagon-like peptide 1) receptor agonists, which work by mimicking a natural gut hormone that helps regulate appetite in the brain.
Studies continue into some of the additional health applications (and possible side effects) of appetite suppressant medications. But de Vreeze said his company was also looking at products to increase muscle retention and protein intake.
“There are some side effects of weight loss medications and that means it's harder to build muscle, it's harder to keep your protein level up. And that's where we come in. We're using ingredients, developing ingredients where that's a kind of compensated,” he said.
Novo Nordisk and Eli Lilly did not immediately respond to CNBC's request for comment.
Consumer goods for airlines.
DSM is not the only company looking to capitalize on the growing weight-loss drug market.
Swiss food giant Nestlé announced last month that it will launch a new range of frozen foods aimed at GLP-1 drug users. The Vital Pursuits range, which will initially include 12 items including whole grain pizzas and bowls, is designed as a nutritional “companion” to medications, the company said.
CEO Mark Schneider told CNBC last week that while weight-loss drugs were changing consumer behavior, “nutritional needs aren't going away.”
GLP-1 drugs “will certainly be an interesting addition to all the other needs we are trying to meet in the food industry,” Schneider said.
Danone CEO Antoine de Saint-Affrique also told CNBC in April that he considers GLP-1s “complementary” to the French food company, adding that they would only increase demand for its nutritional products.
However, according to Barclays analysts, it is still unclear whether weight-loss drugs will make consumers more or less likely to opt for healthy products.
“Greater adoption of GLP-1 drugs could be envisioned as a substitute for food product categories that are more attuned to health and wellness,” analyst Andrew Lazar said in a research note last year.
“That said, consumers could also eat more foods for weight management as they strive to eat healthier and replace those products with more indulgent snack alternatives,” he added.
Such changes could have similar implications for restaurants, food retailers and delivery companies that “proactively pivot” to adopt the drugs, the bank's analysts added. He cited fast food companies, including KFC's Yum Brands and Shake Shack, as potential beneficiaries if consumers see the drugs “offset” such indulgences.
Airlines could also benefit greatly from having more trim passengers as they become increasingly concerned about reducing jet fuel costs. In a September note cited by Bloomberg, Jefferies analyst Sheila Kahyaoglu said united airlines would save $80 million a year if average passenger weight decreased by 10 pounds.
Even pharmaceutical packaging companies could benefit, Barclays said, with companies such as Germany's Gerresheimer seeing a potential 2% to 4% revenue boost from the estimated 100,000 weight loss pharmaceuticals. millions of dollars.
Increasing competition for weight loss drugs
It's not yet clear whether these ancillary products can replicate the meteoric rise of weight-loss pharmaceutical companies like Novo Nordisk and Eli Lilly.
“We believe it is too early for investors to take a definitive position out of healthcare stocks on the impact of GLP-1 drugs, and the range of potential scenarios is very wide,” the Barclays analysts wrote.
When asked if the growing demand for nutritional products was being reflected in his company's share price, de Vreeze acknowledged that it was “too early” to tell.
“It's something that has to be built over time. It's in process. But the moment that changes, it will be reflected,” he said.
The new products arrive as other pharmaceutical companies are hot on the heels of Novo and Eli in a bid to claim a piece of the weight loss pie.
In China, a key market for the drug, about 15 generic versions of Ozempic and Wegovy are currently being developed, according to clinical trial records cited by Reuters on Thursday.
Meanwhile, some analysts have also expressed caution about the continued rise of the weight-loss drug market itself.
“We don't necessarily think that 'miracle' drugs will be miracle drugs forever,” Guillaume Menuet, Citi Wealth's head of EMEA economics and investment strategy, told CNBC on Thursday.
