With over one billion people worldwide affected by obesity, the weight-loss drug market is hot. In 2024, the global market for anti-obesity medications (AOMs) surpassed $30 billion for the first time, marking a tenfold increase since 2020. These medications are transforming the healthcare landscape, offering new solutions for the 40% of U.S. adults classified as obese.
So, with billions in potential sales and an increasingly crowded field, it could be an opportune time for investors to scoop up the shares of companies like Eli Lilly and Company (LLY), Novo Nordisk A/S (NVO), and Amgen Inc. (AMGN), which are doubling down on their efforts to dominate this high-growth sector.
However, the urgency to address obesity isn’t just about weight loss; it’s about combating the serious health risks that come with it. Studies consistently show strong links between obesity and conditions like diabetes, heart disease, and cancer, which cost the U.S. healthcare system $173 billion annually. As awareness grows, more patients and healthcare providers are turning to prescription treatments as essential tools for weight management.
The latest generation of GLP-1 receptor agonists, initially designed for diabetes, has shown unexpected benefits in treating conditions like sleep apnea and kidney disease. The potential for these treatments to improve overall health outcomes has led analysts to call them “miracle drugs,” and their impact is already being felt. Sales of Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy soared by billions in 2024, reflecting both the demand and confidence in these treatments.
With projections estimating the global weight-loss drug market could hit $99.70 billion by 2033, it’s no surprise that pharma companies are racing to develop next-generation treatments. LLY is preparing to release top-line Phase III results for its oral GLP-1 drug in 2025, while other players, including AMGN and NVO, are advancing new treatments that could expand the market even further.
With breakthrough innovations on the horizon and billions in potential sales at stake, the weight-loss drug industry is rapidly becoming one of the most transformative and investable segments in healthcare.
Now, let’s examine the fundamental aspects of the above-mentioned stocks in detail:
Eli Lilly and Company (LLY)
LLY is a medicine company that discovers, develops, manufactures, and markets human pharmaceuticals worldwide. The company offers medicines for diabetes, obesity, rheumatoid arthritis, plaque psoriasis, ulcerative colitis, depressive disorder, and others, in addition to oncology products.
On February 25, LLY introduced 7.5 mg and 10 mg single-dose vials of Zepbound (tirzepatide) for $499 under its new Zepbound Self Pay Journey Program, alongside price cuts for smaller doses. These offerings, available through LillyDirect Self Pay Pharmacy Solutions, eliminate third-party supply chain costs, making obesity treatment more affordable.
Moreover, this move was praised by the Obesity Action Coalition, reinforcing the company’s commitment to improving accessibility in the weight-loss drug market.
On January 13, LLY announced the acquisition of Scorpion Therapeutics’ PI3Kα inhibitor program (STX-478), a once-daily oral treatment for breast cancer and advanced solid tumors currently in Phase 1/2 trials. This strategic move strengthens LLY’s oncology pipeline, with STX-478 targeting 30-40% of hormone-positive breast cancer cases, positioning the company for further breakthroughs in cancer treatment.
For the fourth quarter (ended December 31, 2024), LLY reported revenue of $13.53 billion, representing a 44.7% growth from the prior-year quarter. It reported a non-GAAP gross profit of $11.26 billion, indicating a 46.4% growth from the prior-year quarter, while its operating income improved 115.6% year-over-year to $5.15 billion. In addition, the company’s non-GAAP net income came in at $4.81 billion and $5.32 per share, up 113.6% and 113.7% year-over-year, respectively.
Street expects LLY’s revenue for the fiscal first quarter (ending March 2025) to increase 45.7% year-over-year to $12.78 billion. Its EPS for the current quarter is expected to improve by 82.4% from the prior year to $4.70. Moreover, it beat the EPS estimates in three of the trailing four quarters, which is impressive.
Shares of LLY have surged 17.8% over the past three months and 14.2% over the past year to close the last trading session at $881.40.
LLY’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
LLY has a B grade for Growth and Sentiment. Among 152 stocks in the Medical - Pharmaceuticals industry, it is ranked #27. Click here to see the additional ratings for LLY (Value, Momentum, Stability, and Quality).
Novo Nordisk A/S (NVO)
Headquartered in Bagsvaerd, Denmark, NVO is a global healthcare company engaged in discovering, developing, manufacturing, and marketing pharmaceutical products. It operates through two business segments: Diabetes and Obesity care; and Biopharm.
On January 17, the company announced results from its 72-week STEP UP trial, which evaluated semaglutide 7.2 mg against semaglutide 2.4 mg and a placebo in 1,407 adults with obesity. The higher dose (7.2 mg) led to a 20.7% weight loss, compared to 17.5% with 2.4 mg and 2.4% with placebo. Additionally, 33.2% of patients on the higher dose lost 25% or more of their body weight, demonstrating its superior efficacy in obesity treatment.
In the same month, NVO expanded its collaboration with Valo Health, Inc. to accelerate the discovery and development of novel treatments for obesity, type 2 diabetes, and cardiovascular disease. Originally signed in 2023, the partnership now includes up to 20 new drug programs using Valo’s AI-driven human dataset.
The collaboration has already identified several novel targets for cardiometabolic treatments, with multiple small-molecule drug candidates in preclinical development. This deeper partnership enables NVO to leverage AI and human genetic data for groundbreaking drug discoveries, strengthening its position in the fast-growing metabolic disease market.
NVO’s net sales for the fourth quarter (ended December 31, 2024) increased 30.1% year-over-year to Kr85.68 billion ($12.04 billion). Its gross profit also grew by 30.1% from the year-ago value to Kr72.66 billion ($10.21 billion), while its operating profit (EBIT) came in at Kr36.74 billion ($5.16 billion), up 37.2% year-over-year. The company’s net profit came in at Kr28.23 billion ($3.97 billion), representing an increase of 28.5% year-over-year.
The consensus EPS estimate of $0.88 for the fiscal first quarter (ending March 2025) represents a 7.6% increase year-over-year. The consensus revenue estimate of $11.48 billion for the ongoing quarter represents a 22.2% improvement from the same period last year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has gained 5.3% year-to-date to close the last trading session at $90.59.
NVO’s promising fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It has a B grade for Value, Sentiment, and Quality. It is ranked #13 out of 152 stocks in the Medical - Pharmaceuticals industry. Click here to see NVO’s Growth, Momentum, and Stability ratings.
Amgen Inc. (AMGN)
AMGN is a global biotechnology company focusing on therapeutics for inflammation, oncology, bone health, cardiovascular disease, nephrology, and neuroscience. Its product portfolio includes Enbrel, Otezla, Prolia, Xgeva, Nplate, Kyprolis, Blincyto etc.
On January 17, the company received approval from the U.S. Food and Drug Administration (FDA) for LUMAKRAS® (sotorasib) in combination with Vectibix® (panitumumab) to treat KRAS G12C-mutated metastatic colorectal cancer in patients previously treated with chemotherapy. This approval strengthens AMGN’s oncology portfolio, providing a first-of-its-kind targeted therapy for chemorefractory mCRC and reinforcing its leadership in precision cancer treatments.
On December 10, 2024, backed by its strong financials, AMGN declared a dividend of $2.38 per share for the first quarter of 2025, payable to its shareholders on March 7, 2025.
AMGN’s annual dividend of $9.52 yields 3.07% at the current price level, while its four-year average dividend yield is 3.05%. Its dividend payouts have increased at CAGRs of 8.1% and 8.9% over the past three and five years, respectively. Also, it has a payout ratio of 45.4%.
During the fiscal fourth quarter that ended December 31, 2024, AMGN’s total revenues increased 10.9% year-over-year to $9.09 billion, while its non-GAAP operating income grew 10.2% from the year-ago value to $4.03 billion. Its non-GAAP net income increased 13.2% year-over-year to $2.88 billion. The company’s non-GAAP EPS came in at $5.31, reflecting a 12.7% increase from the prior-year quarter.
In addition, AMGN’s net cash provided by operating activities improved considerably year-over-year to $4.77 billion, while its cash and cash equivalents at the end of the period stood at $11.97 billion, up 9.4% year-over-year.
Analysts expect AMGN’s revenue and EPS to increase 8.4% and 8.3% year-over-year to $8.07 billion and $4.29, respectively, in the first quarter (ending March 2025). In addition, it topped the consensus revenue and EPS estimates in three of the trailing four quarters, which is promising.
Over the past month, the stock has gained 12.5%, closing the last trading session at $309.72.
It’s no surprise that AMGN has an overall rating of B, which equates to Buy in our proprietary rating system. It also has a B grade for Growth and Quality. Of 334 stocks in the Biotech industry, it is ranked #25.
In addition to the POWR Ratings we’ve stated above, we also have AMGN’s ratings for Value, Momentum, Stability, and Sentiment. Get all AMGN ratings here.
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LLY shares rose $15.55 (+1.76%) in premarket trading Tuesday. Year-to-date, LLY has gained 14.37%, versus a 1.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
3 Pharmaceutical Stocks Betting Big on Weight Loss Drugs StockNews.com
