Can GLP-1 weight-loss drug manufacturers keep momentum up?

As GLP-1 weight-loss drugs have boosted several healthcare stocks, Jennison Associates Head of Global Equity Mark Baribeau joins Market Domination Overtime to discuss whether these companies can keep up the momentum.

Baribeau points to Novo Nordisk (NVO) and Eli Lilly (LLY) as companies seeing major revenue growth and likely to split the market. He sees weight-loss and type 2 diabetes drugs as a "paradigm shift" that present huge opportunities for both companies.

However, he notes that while consumer demand for these drugs is skyrocketing, Novo Nordisk and Eli Lilly "don't have the manufacturing capacity to keep up with demand. So the gating factor here is really supply. It's not demand."

He adds that as manufacturing capacities expand, growth will accelerate, making the industry's backdrop look "very, very healthy."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Melanie Riehl

Video transcript

Let's talk about another large addressable market.

But this time in health care and we're talking about uh being overweight and also diabetes, we've seen Novo Nordisk, we've seen Eli Lilly surge in various fits and starts, but this seems like we're still in the opening innings here.

Where do you see these companies going?

Where do you see the whole movement going?

Well, I mean, the, the numbers are staggering.

Uh the, the consensus revenue estimates, I think were no Nordik, I believe are $50 billion by 2027.

And, and for uh Lilian nor Nordik, uh by 2030 the industry could be at $100 billion.

That's, that's the revenue estimate you see emerging now as a, as a consensus.

So these weight loss and uh type two diabetes uh treatment, drugs uh are a paradigm shift and uh two companies are gonna largely split that market.

So it's a huge, huge opportunity.

Um And what we've seen so far is good revenue growth from both companies, but very constrained because they, they don't have the manufacturing capacity to keep up with demand.

So the gating factor here is really supply, it's not demand, the consumer demand is off the charts.

These really are consumer products that makes them very unique in healthcare.

Um versus, you know, something you would take to treat uh high blood pressure or cancer or, or, you know, something very serious like that.

Uh These are, these are consumer products.

So um they do have enormous uh potential and as manufacturing capacity comes online, you'll see revenue uh growth continue to accelerate.

So that's, that's the um the backdrop for that industry.

It looks very, very healthy.