You know that an idea has become mainstream when you hear people discuss it in casual conversation. That's something I've seen when it comes to glucagon-like peptide-1 (GLP-1) drugs.
What started out as a treatment for type-2 diabetes has become a mainstream solution for millions of Americans who struggle with obesity. And increasingly, it's becoming a weight loss solution for individuals who aren't obese but have the means to pay the hefty price tag.
Not surprisingly, investors have seen the stocks of companies that offer GLP-1 drugs soar. In fact, like artificial intelligence (AI), any company that is floating the idea of a GLP-1 drug was getting a lift.
But even as the number of companies throwing their hat in the GLP-1 ring expands, the winners are becoming more defined. In this special presentation, we're looking at seven stocks to consider if you're looking to get a piece of this emerging sector.
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- Novo Nordisk
- Eli Lilly
- Amgen
- Pfizer
- AstraZeneca
- Altimmune
- Viking Therapeutics
#1 - Novo Nordisk (NYSE:NVO)
Novo Nordisk A/S (NYSE: NVO) was the first company to receive FDA approval for its weight-loss drugs. The company’s GLP-1 portfolio includes Ozempic (diabetes) and Wegovy (obesity). It also recently launched Rybelsus which is the only approved GLP-1 treatment that is not injected.
NVO stock is up 194% in the last 12 months. And in the first two quarters of the company’s 2024 fiscal year, revenue is up 23.8%.
However, the 34.5% gain lags behind competitors due to slower market expansion and recent testing that has shown Eli Lilly’s drugs to be more effective. The company recently announced that it expects the shortage of its GLP-1 drugs to continue into 2025.
The company also faces tougher comparisons. In its fiscal year (FY) 2024, revenue growth between the first and second quarter was 3%. That was identical to the same two quarters in FY2023. And the company is also facing regulatory pressure to meet Medicaid requirements for diabetes drugs.
That said, Novo Nordisk has several next-generation diabetes and obesity drugs in its pipeline. And the supply chain issues, while serious, are being offset by approvals in China and the European Union for using Wegovy as a treatment for heart disease.
About Novo Nordisk A/S
Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease.
Read More - Current Price
- $85.00
- Consensus Rating
- Buy
- Ratings Breakdown
- 6 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $150.40 (76.9% Upside)
#2 - Eli Lilly (NYSE:LLY)
Eli Lilly and Co. (NYSE: LLY) is the current leader among GLP-1 drug stocks. Although its 72% growth in the past 12 months lags behind Novo Nordisk, LLY stock is up 64.6% in 2024, nearly double that of NVO stock. In the first two quarters of Lilly’s FY2024, revenue is up 28%. That’s 48% higher than the growth in the same two quarters of FY2023. And GLP-1 drugs now account for approximately 40% of the company’s revenue.
The company was second to market with its GLP-1 drugs. However, recent clinical results have shown its Mounjaro (diabetes) and Zepbound (obesity) drugs to be more effective than Novo Nordisk's, which was first to market.
Lilly is not immune to the supply chain issues that are plaguing this sector. The company simply doesn’t have enough manufacturing capacity to meet the growing demand. At the same time, like Novo Nordisk, Eli Lilly is making efforts to expand into different markets.
About Eli Lilly and Company
Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity.
Read More - Current Price
- $767.76
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 17 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $1,002.22 (30.5% Upside)
#3 - Amgen (NASDAQ:AMGN)
Amgen Inc. (NASDAQ: AMGN) is best known to investors and consumers for its anti-inflammatory drug, Enbrel. In its most recent earnings report, Amgen cited a 15% year-over-year decrease in Enbrel sales driven by a decrease in selling price. However, in addition to inflammation, the company’s pipeline is diversified among general medicine, oncology, and rare diseases.
One of the company’s pipeline candidates is MariTide. Like the offerings from Novo Nordisk and Eli Lilly, MariTide activates the GLP-1 hormone receptor to regulate appetite. However, unlike those drugs, MariTide blocks the GIP receptor, which is an appetite suppressant. Phase 1 trials have shown that, at its highest dose, patients lowered their body weight by 14.5% in 85 days.
An added benefit to MariTide is that patients may only need to take the injection once a month, or even less frequently, and still maintain the benefits. On the other hand, it could take the company years to get MariTide to market and there is the possibility of failure.
About Amgen
Amgen Inc discovers, develops, manufactures, and delivers human therapeutics worldwide. The company's principal products include Enbrel to treat plaque psoriasis, rheumatoid arthritis, and psoriatic arthritis; Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis, and oral ulcers associated with Behçet's disease; Prolia to treat postmenopausal women with osteoporosis; XGEVA for skeletal-related events prevention; Repatha, which reduces the risks of myocardial infarction, stroke, and coronary revascularization; Nplate for the treatment of patients with immune thrombocytopenia; KYPROLIS to treat patients with relapsed or refractory multiple myeloma; Aranesp to treat a lower-than-normal number of red blood cells and anemia; EVENITY for the treatment of osteoporosis in postmenopausal for men and women; Vectibix to treat patients with wild-type RAS metastatic colorectal cancer; BLINCYTO for the treatment of patients with acute lymphoblastic leukemia; TEPEZZA to treat thyroid eye disease; and KRYSTEXXA for the treatment of chronic refractory gout.
Read More - Current Price
- $263.38
- Consensus Rating
- Hold
- Ratings Breakdown
- 11 Buy Ratings, 12 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $319.67 (21.4% Upside)
#4 - Pfizer (NYSE:PFE)
Pfizer Inc. (NYSE: PFE) is another company that’s trying to throw its hat into the GLP-1 arena. In this case, Pfizer is attempting to advance several candidates through its pipeline. As of this writing, the company is advancing danuglipron, which it believes may be the one that makes it to market.
Danuglipron is an oral GLP-1 drug that would be taken daily. Pfizer is hoping that the convenience of taking the medicine in pill form will negate any possible pushback from customers having to take the drug every day.
Like the offering from Amgen, danuglipron is still in clinical trials. And by the time it’s approved (if it makes it that far), it’s unclear what the competitive landscape may look like. However, while you wait, you’ll own an attractive dividend stock. PFE stock pays investors a yield of 5.9% and has been increasing its payout for 15 consecutive years. With a forward price-to-earnings ratio of just 10.69x, the company is undervalued compared to the 18.7 sector average for pharmaceutical stocks in the S&P 500.
About Pfizer
Pfizer Inc discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally. The company offers medicines and vaccines in various therapeutic areas, including cardiovascular metabolic, migraine, and women's health under the Eliquis, Nurtec ODT/Vydura, Zavzpret, and the Premarin family brands; infectious diseases with unmet medical needs under the Prevnar family, Abrysvo, Nimenrix, FSME/IMMUN-TicoVac, and Trumenba brands; and COVID-19 prevention and treatment, and potential future mRNA and antiviral products under the Comirnaty and Paxlovid brands.
Read More - Current Price
- $26.36
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 9 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $32.14 (21.9% Upside)
#5 - AstraZeneca (NASDAQ:AZN)
AstraZeneca PLC (NASDAQ: AZN) is taking a different approach to getting a GLP-1 drug to market by licensing technology from Eccogene for a once-daily GLP-1 pill, ECCO504. The drug is in Phase 1 trials for patients with type-2 diabetes.
Like many of the companies that do not currently have drugs on the market, there’s a lot that remains to be seen about the potential market for ECCO504. But AstraZeneca is forecasting the projected impact from ECO5004 to be $80 billion in revenue by 2030. That’s a 75% increase from the $45.8 billion it generated in 2023.
To put that 8% annual revenue growth into context, AZN stock has delivered a five-year total return of 113.5%. That’s likely to move higher and ensures that the company’s dividend is safe.
And ECCO504 is not the company’s only foray into the weight-loss space. AstraZeneca has also committed $80 million to the Swiss biotech company, SixPeak Rio. This will give AstraZeneca access to SixPeak Rio’s bispecific antibody weight loss therapy, which attempts to promote weight loss while preserving skeletal muscle mass.
About AstraZeneca
AstraZeneca PLC, a biopharmaceutical company, focuses on the discovery, development, manufacture, and commercialization of prescription medicines. The company's marketed products include Tagrisso, Imfinzi, Lynparza, Calquence, Enhertu, Orpathys, Truqap, Zoladex, Faslodex, Farxiga, Brilinta, Lokelma, Roxadustat, Andexxa, Crestor, Seloken, Onglyza, Bydureon, Fasenra, Breztri, Symbicort, Saphnelo, Tezspire, Pulmicort, Bevespi, and Daliresp for cardiovascular, renal, metabolism, and oncology.
Read More - Current Price
- $65.35
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $89.75 (37.3% Upside)
#6 - Altimmune (NASDAQ:ALT)
Many of the stocks on this list are those of large-cap companies. That makes sense since these companies have the financial resources to deploy into an emerging area such as GLP-1. Altimmune Inc. (NASDAQ: ALT) is an exception. With just a $450.58 million market cap as of this writing, the company is a small-cap stock that trades at just $6.41 per share.
Altimmune’s GLP-1 candidate, pemvidutide, is similar to the current offerings from Novo Nordisk and Eli Lilly. However, early reports show that it is more effective at preserving lean muscle mass. That said, the company is actively looking for partners to help it advance pemvidutide through clinical trials.
Altimmune is not for the risk-averse investor. The company is not yet profitable and is not generating significant revenue. But if you’re comfortable with a speculative bet in the GLP-1 space, Altimmune could be a buy low, sell high candidate to fatten your portfolio years down the road.
About Altimmune
Altimmune, Inc, a clinical stage biopharmaceutical company, focuses on developing treatments for obesity and liver diseases. The company's lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist that is in Phase 2 trial for the treatment of obesity and metabolic dysfunction-associated steatohepatitis.
Read More - Current Price
- $8.25
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $20.00 (142.4% Upside)
#7 - Viking Therapeutics (NASDAQ:VKTX)
With a $6.67 billion market cap, Viking Therapeutics Inc. (NASDAQ: VKTX) is a mid-cap company to watch in the GLP-1 space. Like Altimmune, Viking is still a clinical-stage company, meaning it doesn’t have a product available in the market.
The company’s lead candidate, VK2735, is in Phase 2 trials. In February 2024, Viking received promising data from a mid-stage trial that showed it not only rivaled but, in some cases, outperformed drugs like Ozempic and Mounjaro. VK2735 is a weekly injection, but the company is also planning to test an oral tablet version.
What may make VKTX stock more attractive to investors is the $942 million it has in cash and cash equivalents. That means the company should have no issue getting VK2735 through clinical trials.
Although the company is not yet profitable, analysts have given the stock a Buy rating with a price target that forecasts an 85% gain in the next 12 months.
About Viking Therapeutics
Viking Therapeutics, Inc, a clinical-stage biopharmaceutical company, focuses on the development of novel therapies for metabolic and endocrine disorders. The company's lead drug candidate is VK2809, an orally available tissue and receptor-subtype selective agonist of the thyroid hormone receptor beta (TRß), which is in Phase IIb clinical trials to treat patients with biopsy-confirmed non-alcoholic steatohepatitis, as well as NAFLD.
Read More - Current Price
- $42.25
- Consensus Rating
- Buy
- Ratings Breakdown
- 13 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $106.75 (152.7% Upside)
Now that GLP-1 drugs are in the mainstream, investors could be wondering if they're too late to fatten their portfolio with weight-loss stocks. Right now, GLP-1 drugs are best known for treating obesity. But there is an increasing emphasis on having these drugs approved for other conditions.
And that's just one way the market could expand. Another way is if more prospective patients become convinced that GLP-1 drugs are safe and effective. Privately-owned Dandelion Health is building a data library that will help capture data associated with the effectiveness, benefits, and side effects of GLP-1 drugs. That data may also provide useful insights about potential label expansions for other medical conditions.
All of which means this is still a sector with the potential for massive growth. That growth can come from one or more of the stocks in this presentation. Or if you'd prefer to invest through a fund, the Tema Cardiovascular and Metabolics ETF (NASDAQ: HRTS) is a name to consider.
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