The demand for drug therapies for obesity is on the rise. New drugs with efficacy rivaling bariatric surgery, with only minor tolerability issues, have replaced older drugs burdened with significant cardiovascular side effects and mediocre efficacy. The approval of Novo Nordisks’ NVO GLP-1 agonist Wegovy in 2021 led to increased demand for the active ingredient semaglutide in various forms, including the diabetes drug Ozempic. Mounjaro, the Eli Lillys LLY-approved diabetes drug, is poised to generate even stronger weight-loss results and will launch as an obesity treatment around the end of 2023. We think Novo and Lilly will continue to lead the market of obesity over the next 10 years, with incremental innovation in this rapidly expanding market that will underpin their broad economic moats. We expect new therapies launched in 2026 and beyond by companies like Amgen AMGN and Pfizer PFE to grow to about a quarter of the market by 2032.

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