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ETFs in Focus as Competition Heats Up in Weight Loss Drug Segment
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Global obesity rates have nearly tripled since 1975 and are expected to affect over half the population by 2035, per WHO and Goldman Sachs. Pioneering GLP-1 treatments, such as Ozempic, Wegovy, and Zepbound, are now at the forefront of medical advancements in weight management.
GLP-1 medications, initially used to treat diabetes, were later discovered to suppress appetite and lead to considerable weight loss. Recent studies suggest that GLP-1 drugs may also slow the progression of Parkinson’s symptoms in humans and lower the risk of heart attack, stroke and cardiovascular death by approximately 20%.
Two companies — Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) — have so far dominated the weight-loss drug market and their shares have surged over the past year due to soaring demand for their products. However, shares of Eli Lilly (known for Zepbound) lost 6.3% on Jul 18, and shares of Novo Nordisk (known for Wegovy) are down 4% on Jul 18, 2024. Danish biotech firm Zealand Pharma, also in the obesity treatment race, saw an 8.4% drop in its shares.
Shares of those companies slid due to rising competition. Roche recently announced encouraging Phase I trial data for its new obesity drug candidate, CT-996, acquired through Carmot Therapeutics. The once-daily pill showed a placebo-adjusted average weight loss of 6.1% in obese patients without Type 2 diabetes within four weeks. Roche's chief medical officer, Levi Garraway, emphasized the potential for CT-996 to address both weight management and glycemic control.
Market Impact on Competitors
Despite Roche's promising results, CEO Teresa Graham indicated that the widespread availability of oral obesity treatments may still be several years away. The competition in the weight loss drug market is becoming cutthroat, primarily due to the appeal of non-injectable alternatives such as Roche's CT-996.
ETFs in Focus
Against this backdrop, below we highlight a few pureplay weight-loss drug maker ETFs that can be tapped on this soaring trend.
The Tema Obesity & Cardiometabolic ETF seeks to provide long-term growth of capital by investing in companies leading the fight against obesity and cardiometabolic diseases. The fund charges 75 bps in net fees. The fund has about $83.2 million.
The fund has 43 holdings in total. Vertex Pharma (6.17%), Amgen (5.47%) and Eli Lilly (5.29%) are the top three stocks of the fund. The United States takes 78.22% of the fund, followed by Denmark (8.05%) and the United Kingdom (3.64%).
Amplify Weight Loss Drug & Treatment ETF (THNR - Free Report)
The newly-launched Amplify Weight Loss Drug & Treatment ETF seeks investment results that generally correspond to the performance of the VettaFi Weight Loss Drug & Treatment Index. The fund charges 59 bps in fees.
The 22-stock fund is heavy on Eli Lilly (15.71%) and Novo Nordisk A/S (14.98%). Drug manufacturers take about 70% of the fund, while enablers take the rest. The United States takes 51% of the fund, followed by Denmark (18%) and Japan (10%).
The 32-stock fund, which also made a recent entry, provides exposure to companies involved in the development of pharmaceutical drugs and supplements that can be utilized to help individuals lose weight, maintain an ideal weight, and maintain body composition during weight loss. OZEM is an actively managed ETF. The fund charges 59 bps in fees.
This fund is heavy on Eli Lilly (20.93%) and Novo Nordisk A/S (20.70%). Pharma stocks take about 66.4% of the fund while biotechnology (30.9%) takes the next big chunk. The United States occupies 53% of the fund, followed by Denmark (26%) and Japan (6.9%).
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ETFs in Focus as Competition Heats Up in Weight Loss Drug Segment
Global obesity rates have nearly tripled since 1975 and are expected to affect over half the population by 2035, per WHO and Goldman Sachs. Pioneering GLP-1 treatments, such as Ozempic, Wegovy, and Zepbound, are now at the forefront of medical advancements in weight management.
GLP-1 medications, initially used to treat diabetes, were later discovered to suppress appetite and lead to considerable weight loss. Recent studies suggest that GLP-1 drugs may also slow the progression of Parkinson’s symptoms in humans and lower the risk of heart attack, stroke and cardiovascular death by approximately 20%.
Two companies — Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) — have so far dominated the weight-loss drug market and their shares have surged over the past year due to soaring demand for their products. However, shares of Eli Lilly (known for Zepbound) lost 6.3% on Jul 18, and shares of Novo Nordisk (known for Wegovy) are down 4% on Jul 18, 2024. Danish biotech firm Zealand Pharma, also in the obesity treatment race, saw an 8.4% drop in its shares.
Shares of those companies slid due to rising competition. Roche recently announced encouraging Phase I trial data for its new obesity drug candidate, CT-996, acquired through Carmot Therapeutics. The once-daily pill showed a placebo-adjusted average weight loss of 6.1% in obese patients without Type 2 diabetes within four weeks. Roche's chief medical officer, Levi Garraway, emphasized the potential for CT-996 to address both weight management and glycemic control.
Market Impact on Competitors
Despite Roche's promising results, CEO Teresa Graham indicated that the widespread availability of oral obesity treatments may still be several years away. The competition in the weight loss drug market is becoming cutthroat, primarily due to the appeal of non-injectable alternatives such as Roche's CT-996.
ETFs in Focus
Against this backdrop, below we highlight a few pureplay weight-loss drug maker ETFs that can be tapped on this soaring trend.
Obesity & Cardiometabolic ETF (HRTS - Free Report)
The Tema Obesity & Cardiometabolic ETF seeks to provide long-term growth of capital by investing in companies leading the fight against obesity and cardiometabolic diseases. The fund charges 75 bps in net fees. The fund has about $83.2 million.
The fund has 43 holdings in total. Vertex Pharma (6.17%), Amgen (5.47%) and Eli Lilly (5.29%) are the top three stocks of the fund. The United States takes 78.22% of the fund, followed by Denmark (8.05%) and the United Kingdom (3.64%).
Amplify Weight Loss Drug & Treatment ETF (THNR - Free Report)
The newly-launched Amplify Weight Loss Drug & Treatment ETF seeks investment results that generally correspond to the performance of the VettaFi Weight Loss Drug & Treatment Index. The fund charges 59 bps in fees.
The 22-stock fund is heavy on Eli Lilly (15.71%) and Novo Nordisk A/S (14.98%). Drug manufacturers take about 70% of the fund, while enablers take the rest. The United States takes 51% of the fund, followed by Denmark (18%) and Japan (10%).
Roundhill GLP-1 & Weight Loss ETF (OZEM - Free Report)
The 32-stock fund, which also made a recent entry, provides exposure to companies involved in the development of pharmaceutical drugs and supplements that can be utilized to help individuals lose weight, maintain an ideal weight, and maintain body composition during weight loss. OZEM is an actively managed ETF. The fund charges 59 bps in fees.
This fund is heavy on Eli Lilly (20.93%) and Novo Nordisk A/S (20.70%). Pharma stocks take about 66.4% of the fund while biotechnology (30.9%) takes the next big chunk. The United States occupies 53% of the fund, followed by Denmark (26%) and Japan (6.9%).