This is the potion for weight loss! How to structure the weight loss medicine industry?

There is a saying, “A white veil, and a fat one destroys everything.” In many people's opinion, obesity may be the number one killer that affects color values. In the medical field, obesity is also an important trigger for many common diseases such as cardiovascular disease, diabetes.

Therefore, for overweight people, it can be said that it is a lot if you can lose weight by losing weight, both improve color values and reduce the potential risk of certain diseases. But most of the people who are thinking about losing weight are shouting slogans in their mouths, and friends are determined that few really succeed in losing weight.

Because if you want to lose weight, you need to reduce your energy intake or increase your energy consumption. All you need to do is eat less and exercise more, keep your mouth shut, and move your legs. The question is, besides the temptation of food and the tedium of exercise, which side do most people choose? From a human point of view, the answer is not self-explanatory.

Something that is antihuman, it may be okay to persist for a few days a day, but if you can stick with it for a long time, there are only a few people who can decide to lose weight on their own initiative, and this may be the main reason why it is difficult to lose weight on their own initiative. So, is there a way to control your weight with the help of external forces such as drugs? This drug is often referred to as weight loss medicine, just that most weight loss drugs are exaggerated, difficult to trust, and difficult to form a consensus.

But as Tesla founder Elon Musk revealed on social media in October last year that the secret to losing 18 kg in a month was fasting and Wegovy, plus other celebrities' claims that Wegovy, a weight loss product whose core ingredient Semaglutide began to erupt in the United States.

The weight loss drug market is a very large market, with many related listed companies in the capital market. The direct online launch of weight loss pills has also ignited the attention of companies in the entire weight loss drug industry chain.

In this article, I will tell you in detail about the weight loss drug industry that is at the heart of GLP-1. The framework of the article mainly includes:

1. What is the principle of weight loss pills?

2. What is the market outlook for weight loss pills?

3. What is the competitive situation of weight loss pills?

4. Comparison of two major weight loss drug giants

1. What is the principle of weight loss pills?

Having said that, the essence of weight loss does not depart from four words: eat less and eat more, and the principle of diet pills comes down to the two words “eat less.” Since it is difficult to keep your mouth shut by your own will, you can keep your mouth shut with medication.

The most crucial ingredient in this type of weight loss drug is an insulin called GLP-1, a hormone that lowers blood sugar and is initially used to treat diabetes. But slowly, it became multi-faceted.

Several scientific studies have shown that GLP-1 can reduce food and water intake by promoting satiety. That is, under the influence of this hormone GLP-1, you feel full how much you do not eat, your appetite is greatly reduced, and you eat less. Is this not ideal for weight loss?

However, GLP-1 is easily degraded in the body, which means that the duration of the drug is somewhat short. To solve this problem, GLP-1RA was born. IT IS AN ARTIFICIALLY SYNTHESIZED GLP-1 THAT IS NOT EASILY DEGRADED AND HAS A LONGER DRUG DURATION AND CAN BE USED TO TREAT DIABETES AND OBESITY.

So far, a total of 7 types of GLP-1RA have been approved in the US market, of which the most attention is currently being called Smeagroptide. As a GLP-1RA drug, Smegrupeptides interact with the brain to suppress appetite and send out satiety signals. It is currently the most widely used drug in the field of weight loss. Musk shared on social media on Wegovy, the brand name of Smegrupeptides slimming pills under Norwood.

2. What is the market outlook for weight loss pills?

Obesity is a more common phenomenon among the population. Excess weight can affect not only color values, but also greatly affect physical health.

New research is proving that weight loss is not only a focus of treatment for obesity, but also for many related diseases, including cardiovascular disease, diabetes, stroke, and more. The World Health Organization estimates that more than 7.5 million people worldwide suffer from obesity, and 5% of deaths worldwide each year are related to obesity.

Because of this, more and more drugs that treat obesity are included in the scope of medical reimbursement. For example, in the United States, about 4 million adults who are overweight have access to related drugs through insurance plans, which to some extent broadens the range of people who use weight loss drugs and also promotes the expansion of the market for weight loss drugs.

According to Morgan Stanley, the global obesity market will likely be dominated by the US market in the future, with a market size that could grow from $24 billion in 2022 to $70 billion in 2030, with a combined annual growth rate of more than 50% over the period, which is expected to be quite staggering.

Then in the obesity market, GLP-1 will again occupy a weighty position. Because GLP-1 is used more than just for weight loss, but more so for diseases such as diabetes, according to agency reports, GLP-1's market size is forecast to grow by $224 billion in 2022 to $558 billion in 2032, dominated by Simegropeptides and growing faster than the overall growth rate of GLP-1.

3. What is the competitive situation for weight loss drugs?

Since the potential of the obesity market represented by GLP-1 is amazing, what companies can do with a cup of soup? As of now, there are nine major GLP-1 drugs approved, most of which are currently limited to the treatment of diabetes, approved for weight loss purposes, with only Norwood's Wegovy and Saxenda before November 2023.

However, in early November 2023, Hilo's Tirzepatide (brand name: Mounjaro) also received FDA approval in the field of weight loss indications and will soon be commercialized, with the brand name Zepbound for its weight loss drug prescription.

According to morningstar, the market for GLP-1 drugs in the future will be dominated by Norwood & Lee. Among them, Nove and Nord are the first to emerge in the weight loss market, leading the way in terms of brands, pipelines and productivity, with better clinical results, or in the future. By 2023, Norwood is expected to have 36% of the market share, and Lai will have a market share of 40%.

In addition to these two companies, two other pharmaceutical giants, Pfizer and Anjin, have some potential for GLP-1 drugs that are in clinical development, if clinical progress goes well and successfully commercialized, or will capture about 3% and 4% of the market share by 2032, respectively.

4. Comparison of two major weight loss drug giants

For many years, Norwood and Lee were the leading pharmaceutical giants in the field of diabetes, and today they have opened a new growth story in the field of weight loss drugs. Their current market capitalization also occupies the top two positions in the US pharmaceutical sector. So, from a fundamental point of view, how do these two giants compare in the past?

In terms of results, Norwood and Lloyd's revenue is relatively large, ranging between $250 billion and $300 billion, but Nove's performance has been relatively faster in the past two years. Taking the 2020-2022 results as an example, Norwood's two-year combined revenue and net profit growth was approximately 9.9% and 6.9%. The combined revenue and net profit growth of 7.8% and 0.4%, respectively.

Looking at the three most recently disclosed quarterly reports, Norwood's revenue and net profit grew 28.9% and 56.0%, respectively, while Lai's revenue grew 36.8% year-on-year, while net profit suffered a loss due to non-recurring gains, but its operating profit grew by 76.1% year-on-year, which overall growth was against Norwood and Nord.

In terms of profitability, from a shareholder return and product net interest rate perspective, Norwood's ROE and net interest rate for 2022 were 72.0% and 31.4%, respectively, exceeding 63.6% and 21.9% respectively.

In terms of market capitalization and valuation, the market capitalization of NWB and Lai is $453.7 billion and $5816.5 billion, respectively, with a static market earnings estimate of 56.2x and 88.8x, respectively, based on 2022 net profit, and relatively higher market capitalization and valuation.

Finally, to summarize,

The principle of GLP-1 diet pills is to reduce food intake by reducing appetite.

The potential for obesity is huge, and many people also have a huge market space for weight loss drugs to control disease risk and improve their body value.

The agency predicts that the weight loss drug market will be dominated by Norwood and Pfizer, and companies such as Pfizer and Ensign also have potential opportunities.

In terms of comparison between the two giants of weight loss drugs, Norwood and Nord have outperformed their performance, profitability outperformed them, and market capitalization and valuation were lower than those of Yom.