The anti-obesity drug market could be worth $100 billion by 2030, according to analysts from Goldman Sachs. It's a mammoth market and one that looks to be heating up with a growing number of large healthcare companies showing interest in the space. Below, I'll look at some of the top names in the weight-loss market today, and others you may not have realized could be potential rivals in the future.
The early leaders
Two of the biggest names in weight loss today are Eli Lilly (LLY 1.19%) and Novo Nordisk (NVO 0.84%). Eli Lilly makes Zepbound (tirzepatide) while Novo Nordisk is the name behind Ozempic (semaglutide), its diabetes treatment people have been using off-label for weight loss, and Wegovy (semaglutide), its actual weight-loss drug.
These glucagon-like peptide-1 (GLP-1) agonists help curb appetite and have been rising in popularity, and that trend should continue for the foreseeable future. The early results suggest that Zepbound, also marketed under the name Mounjaro for diabetes, can help people achieve more weight loss than Wegovy. In clinical studies, tirzepatide was able to help patients lose 26.6% of their body weight over 84 weeks. By comparison, patients taking Wegovy lost about 15%, over a shorter period of 68 weeks.
This is still the early stages and a lot can change, but these are the two companies and the drugs that look poised to dominate the weight-loss market in the years ahead.
The laggards
A couple of companies that investors shouldn't count out in the battle for weight-loss supremacy just yet are Pfizer (PFE 0.55%) and AstraZeneca (AZN 0.19%). While neither has a weight-loss drug that can compete with Wegovy or Zepbound today, they are working on drugs that could snag some market share in the future.
Earlier this month, Pfizer announced that it was discontinuing a twice-daily weight-loss drug due to too many adverse side effects on patients. But it is still developing a once-daily version of danuglipron, which it is optimistic may have fewer side effects. A daily pill could be a more enticing treatment option for patients; both Wegovy and Zepbound are injectables. Both Novo Nordisk and Eli Lilly are working on oral weight-loss treatments and the company that comes out with a safe and effective pill could prove to be the market leader in the long run, which is why investors should be careful not to rule out Pfizer's potential in the market just yet.
AstraZeneca is another company that is making an attempt to bring a weight-loss drug to market. While it gave up on its GLP-1 drug candidate cotadutide earlier this year, the company doesn't appear to be done with pursuing weight-loss treatments. Last month, AstraZeneca announced it would be acquiring a license for an anti-obesity medication, ECC5004, from a Eccogene, a Chinese-based company. The deal could be worth up to $2 billion.
What's promising about the drug is that AstraZeneca believes it may not have as many side effects as the injectables in the market today. If that turns out to be true, it could be a potential underdog in this race. It's still early on and the drug is entering phase 2 trials but it's one worth keeping an eye on.
The long shot
Yet another large healthcare company looking to be a player in the mammoth weight-loss market is Roche (RHHBY 0.77%). This month, it announced it would be acquiring Carmot Therapeutics for an upfront payment of $2.7 billion. It could pay another $400 million if certain milestones are achieved.
Through the deal, Roche will acquire a promising once-daily injectable, CT-388. The caveat, however, is that the drug is still in early-stage trials and even if it proves to be effective and safe, it may not be on the market until 2030 or later. That puts Roche firmly at the back of the pack right now as by then a lot could change in the industry. While it could pursue more acquisitions to accelerate its opportunities, at this point, it could still be years before investors know how strong of a player Roche is in the weight-loss market.
Which stock is best for investors?
If you're looking for a top weight-loss stock to buy, then Eli Lilly and Novo Nordisk are still your best choices today -- provided that you are comfortable with their respective valuations. Novo Nordisk is a bit cheaper (it trades at around 40 times earnings while Eli Lilly is around 100) but both could be good buys for the long haul.
The other stocks are simply too far behind right now and it's too early to tell if they will abandon their weight-loss products; both Pfizer and AstraZeneca have recently given up on less-than-promising treatment options. And Roche isn't any more attractive at this rate, as it doesn't appear to be in any rush to get a competitive product to market anytime soon.
Unless you have other reasons for investing in Pfizer, AstraZeneca, or Roche, you may be better off taking a wait-and-see approach with these healthcare stocks for now, as there is no certainty they will have any competitive weight-loss products available in the future.