What to consider when investing in GLP-1 stocks
To put cash to work in GLP-1 companies, focus on businesses with differentiated drug candidates, a robust financial foundation, and the manufacturing capabilities to meet high demand in the future from healthcare consumers. Expanding therapeutic indications for these drugs beyond weight loss/diabetes and developing more convenient, long-acting delivery methods remain key focuses for leading GLP-1 players.
The market is dominated by Eli Lilly and Novo Nordisk right now. However, competition is heating up, and the landscape is likely to become more fragmented in the next decade.
What are GLP-1 medications, and how do they work?
GLP-1 drugs, also known as GLP-1 receptor agonists, work by mimicking the effects of a natural hormone called glucagon-like peptide-1 (GLP-1). These products primarily target the pancreas and brain to regulate blood sugar and appetite to enable weight loss and better blood sugar control.
GLP-1 drugs stimulate the pancreas to release insulin in response to meal-related blood sugar increases. This helps to lower blood sugar levels after eating. These drugs also reduce the amount of glucose produced by the liver, further contributing to blood sugar control.
Who makes GLP-1 drugs?
Novo Nordisk's GLP-1 portfolio includes Ozempic, Rybelsus, and Wegovy, all of which are based on the peptide semaglutide. The company is currently seeking regulatory approval for CagriSema, a once-weekly injection for adults with obesity and type 2 diabetes. It is also planning further clinical development of the subcutaneous and oral formulations of amycretin, a single-molecule dual-action weight loss drug.
Eli Lilly manufactures several GLP-1 receptor agonists, including Mounjaro for type 2 diabetes and Zepbound for weight loss in adults. The company is also developing an extremely promising oral GLP-1 medication, orforglipron. Eli Lilly has filed for approval for the drug for weight loss, and another application for the diabetes indication is expected to follow later in 2026.
