Obesity review: World Health Organization weighs in on weight loss drugs
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The healthcare industry may be turning a corner with regards to weight loss and chronic obesity as a new generation of highly-effective drugs continue to make headlines. These GLP-1 agonists, like Novo Nordisk's (NVO) Wegovy, as well as Eli Lilly's (NYSE:LLY) dual-action Mounjaro, can help people lose anywhere from 10%-20% of their initial body weight. The medications are injected on a weekly basis, and make people feel satiated for longer by slowing hunger signals to the brain and the rate at which a person's stomach empties.
Fine print: "The kind of communication that has been done around these drugs - 'We've found a solution' - that's wrong," said Francesco Branca, director of nutrition and food safety at the World Health Organization. "This is not a silver bullet," he added, but must be "part of a comprehensive approach" that includes diet and exercise. It comes as the WHO conducts its first review of obesity management guidelines since 2000, which will evaluate the use of weight-loss drugs in children and adolescents, and will later update recommendations for adults.
In terms of statistics, the worldwide prevalence of obesity has nearly tripled between 1975 and 2016. In the U.S., one out of three U.S. adults are now obese (two out of three are overweight), and if the trends continue, estimates predict that roughly half of all men and women will be obese by 2030. That highlights the importance of Wegovy, which is approved for weight-loss in the U.S. and Europe, and Mounjaro, which is expected to receive American approval later this year (it's currently only authorized to treat Type 2 diabetes).
Outlook: Investors have applauded the potential for the drugmakers, sending shares of Novo Nordisk (NVO) and Eli Lilly (LLY) up 63% and 52%, respectively, over the past year. While there are supply concerns and prohibitive price tags on the consumer side, further profits may be in store with Medicare coverage and upgraded guidance, especially with the long-term need to stay on the shots for life. "The company now appears able to meet the high demand for its diabetes and weight loss products," SA analyst Clinically Sound Investor writes in a new article entitled, Novo Nordisk Has Some Room To Run.