The weight-loss market has become one of the most active therapeutic areas in the pharmaceutical industry over the past few years. And based on analyst projections, it will continue growing at a good clip for the foreseeable future.
Plenty of drugmakers are looking to gain a foothold in this market. Two of the most promising candidates are Novo Nordisk (NVO 1.79%) and Amgen (AMGN 1.83%). But which one of these two giants is the better weight loss stock to buy right now? Let's find out.
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The case for Novo Nordisk
Novo Nordisk is already a leader in weight loss. Its famous GLP-1 drug, Wegovy, is one of the best-selling medicines in this niche. And it recently launched an oral version of Wegovy.
The company also has several pipeline candidates that should make meaningful progress in the next couple of years. It's CagriSema, which outperformed Wegovy in a head-to-head clinical study and is under consideration for approval.
NYSE: NVO
Key Data Points
Another promising candidate, amycretin, is in phase 3 studies. Still another of the company's exciting anti-obesity programs, UBT251, recently showed strong efficacy in a mid-stage trial conducted in China. Over the next few years, Novo Nordisk should expand its portfolio of approved weight loss medicines and could ride this wave well into the next decade. That's why it might be a good pick for investors to capitalize on this market.
The case for Amgen
Amgen doesn't have an approved weight loss medicine yet. However, it has made progress with its leading candidate, MariTide, which is now in phase 3 studies. The drug is being investigated in several different areas, including weight management, obstructive sleep apnea (OSA) treatment, and effects on cardiovascular outcomes.
NASDAQ: AMGN
Key Data Points
MariTide could earn approval within the next three years, provided it performs well in ongoing studies. It does have a potentially significant advantage: It can be administered once a month, whereas Novo Nordisk's Wegovy is taken once weekly. The friendlier dosing regimen may give MariTide an edge, even with slightly lower efficacy than rival products. According to some estimates, MariTide could generate $3.7 billion in sales by 2030, potentially making Amgen a non-trivial player in this market.
Which is the better buy?
There's no question that Novo Nordisk has a better portfolio and pipeline of weight loss products. However, the Denmark-based pharmaceutical leader depends almost entirely on its GLP-1 products (which are also approved for diabetes and other conditions) to drive top-line growth. That's a problem, since it has lost market share to its biggest competitor, Eli Lilly, in recent years. And even with its newer products, Novo Nordisk will struggle to regain its former leading position.
By contrast, Amgen's portfolio is more diversified. The company may succeed in joining this lucrative market in the next few years, but even if it doesn't, it should recover pretty quickly. In other words, Amgen can provide exposure to the weight-loss market, but with limited downside if it doesn't perform as well in this space as expected.
Novo Nordisk likely has more upside potential, especially if amycretin and UBT251 ace ongoing clinical trials. But its prospects are far more dependent on the performance of its anti-obesity drugs, and if it fails to deliver, its shares will continue to plunge. That's why, in my view, Amgen is the safer bet right now for investors looking to cash in on the rise in weight loss drugs.
