Anyone who’s been on a diet can probably relate: those first lost pounds are met with a sense of exhilaration. The voice inside one’s head screams: “I’ve got it!” But then, it inevitably becomes a slog. The initial novelty wears off, and the real work begins. Investors can see parallels to the initial euphoria around Novo Nordisk’s Vigovi and Eli Lilly’s Zipbound. The drugs, which mimic incretin hormones such as GLP-1 and GIP to help regulate blood sugar, suppress appetite and help with weight loss, offer patients the promise of results similar to those seen with bariatric surgery. Reaching the level. The medical community hailed once-weekly injections as game changers, and investors bid up the stock, seeing a blockbuster opportunity. But it did not last. Yuri Khojamiryan, chief investment officer at Tema ETFs, told CNBC that investors hit “peak enthusiasm” last summer. The firm manages the Tema GLP-1, Obesity and Cardiometabolic ETF (HRTS), and remains optimistic about the category’s long-term growth potential. Especially as market leaders Novo and Lilly present more clinical evidence that GLP-1s work to improve overall health in addition to weight loss. Still, the mood has cooled as the pace of growth has proved unpredictable, leading to disappointing earnings and pessimistic investors. As the outlook for GLP-1 drugs has become more murky, some stocks that were expected to be affected by the drug’s success have recovered. Both Novo and Lilly have spent billions to expand manufacturing capacity to meet strong demand. The companies also had to contend with drug compounders who encroached on their business by taking advantage of a loophole that allowed pharmacies to make shortage versions of drugs. Where the weight loss trade in 2025 will be determined by further increases in supply, news of next-generation drugs in the pipeline and regulatory clarity around drug pricing and access to GLP-1. “Lily and Novo need to start delivering better results,” Khudajamerian said. “… That’s going to benefit all players. And then orals can start to unlock that one last segment. … Once you have oral, the size of the market starts to grow. ” Many patients will find it easier to take oral versions of the drugs, especially the once-weekly injections that are currently required. In addition, they are less expensive and easier to produce, which will reduce supply constraints. A trillion dollar market cap ahead? Phase 3 data on Lilly’s oral GLP-1 drug orforglipron are expected next year. Positive data could put the stock back on its march to a $1 trillion market capitalization. During the first half of the year, Lilly’s stock seemed destined to hit the milestone. But as of Friday’s close, shares had fallen 13 percent over the past six months. Year-to-date, the stock is still up nearly 33%, outpacing the S&P 500’s 26% gain. LLY YTD Mountain Eli Lilly shares the year to date. Analysts are optimistic about Lilly’s outlook. According to FactSet, 77% rate the stock a buy or overweight. Only one is on sale. Shares are expected to rise more than 30% from Friday’s close of $767.76 to an average price target of $1,008. However, the stock is not immune to the political environment that has put pressure on pharmaceutical stocks. There is concern that Robert F. Kennedy Jr., President-elect Donald Trump’s nominee to head the US Department of Health and Human Services, could limit the use of GLP-1, according to Barclays analysts. But it’s unclear how Kennedy might prioritize various policy initiatives if confirmed. Also, there have been positive comments from Elon Musk about GLP-1 drugs, which could support the category. “We see Lilly in a strong position to work creatively with the new administration to expand access to GLP1s (although recognizing that there is always a trade-off between access and cost),” Bernstein analyst Courtney said. Brain wrote in a recent note to clients. Compared to Novo, she expects Lilly to have a slight advantage as a US-based company and a faster path to scale up production. Meanwhile, the Biden administration proposed a rule that would have allowed Medicare and Medicaid to cover weight-loss drugs. Lilly and Novo are working to gather clinical evidence that GLP-1 drugs help conditions like sleep apnea and reduce cardiovascular risk — a strategy that has helped more patients get coverage. is It’s unclear whether the new administration will take up that goal, or drop the ban on weight-loss drug coverage in federal insurance programs. CagriSema Disappoints Hope for Novo’s stock rested on clinical trial data for CagriSema, its next-generation obesity drug. When the news broke on Friday, the company saw $125 billion in market value wiped out. Trial patients lost an average of 22.7 percent weight after 68 weeks. The result was below Novo’s expected 25% to 30% range, although the Danish company said it was “encouraged” by the data. With Novo’s shares trading at their lowest level in 18 months, average analyst price targets estimate the stock could rise 58% in the coming year. Several analysts said Friday’s reaction was too intense and was a poorly designed trial and error of high expectations. NVO YTD Mountain Novo Nordisk shares year-to-date Like Wegovy and Ozempic, CagriSema is administered by weekly injection and contains semaglutide. However, the drug also contains cagrilintide, a separate molecule that acts like amylin, a pancreatic hormone. Patients who lost weight in the trial topped the Vegovi by an average of 15%, and ZipBound’s results in clinical studies were about 23%. And about 40.4% of those enrolled in the CagriSema trial lost more than 25% of their starting weight. In addition, not all patients took the highest dose of the drug, which raised questions about the study. Novo said it is going to start a new trial in the first half of next year and will likely submit the drug for regulatory approval late next year. According to Stifel analyst Eric LeBerrigaud, 25% seemed like a “magic number” because it would have made CagriSema a product that would help patients achieve significant weight loss and be ahead of rival Lilly’s Zipbound. will provide the greatest opportunity. Novo is under pressure to reduce its reliance on Semaglutide, the active ingredient in both Vigovi and the diabetes drug Ozempic, as it could be next on the list of drugs for Medicare price negotiations. “[Semaglutide] It is expected to represent around 70% of the group’s revenue in 2027, across different formulations and brand names, and although it is still part of CagriSema, the cagrilintide component of the compound will be protected by the manufacturer of the drug. Le Berrigaud wrote. Another company, Zealand Pharma, is working on the Emelin analog drug, Novo reacts to news that Novo’s experience indicates that this month How hard will it be to break the duopoly it built with Amgen in the early 2000s? Experimental drug Maritide helped patients lose 20 percent of their weight, hailed as a breakthrough, but now investors Need to be more impressed, and shares of VKTX Mountain Viking Therapeutics have fallen to date, but dozens of companies, large and small, are still chasing the holy grail is wide, And some players may emerge with a manufacturing advantage to maintain their benefits to patients, while others may create a drug that provides health benefits for some patients. is better So the arena will be crowded. Among those stocks, shares of Viking Therapeutics are “quite interesting,” Tema’s Khudjamirian said. “Their data is quietly getting better and better, while their share price is going down.” Viking Therapeutics shares are up 127% year to date, but the stock, which closed Friday at $42.25, has more than halved since it hit an all-time high of $99.41 on Feb. 28. has taken , the other side of the weight loss drug trade is rebounding. These stocks include diabetes technology providers such as Dexcom and Insult. Shares of Dexcom are still down more than 35 percent this year, but the stock is up about 14 percent over the past three months. Insulet has fared even better. Its shares are up 2% this year, thanks to a 34% rally over the past six months. DXCM YTD Mountain Dexcom Year to Date Barclays analysts estimate that 2025 will be an “inflection point” in the GLP-1 narrative, as the number of patients taking the drug falls far short of the potential market size. Increasing drug production will enable access to additional patients. This could mean food and beverage stocks will see a more pronounced impact from changes in consumer habits, he said. Companies such as Nestlé and Conagra have started developing new products to serve this market. Campbell Soup has commented on how this soup can be suitable for those taking medications. Analysts at Barclays expect Danone, with its protein-packed yogurt brands, to be the “biggest potential winner from the GLP-1 landscape.” European listed shares are up almost 9% year to date “Health is really at the heart of Danone’s brand and ethos – and this is reflected in its portfolio, 90% of which is considered suitable for everyday use. and non-HFSS (high) fat salt and sugar),” Barclays analyst Warren Ackerman said in a Dec. 16 research note. “With protein products. Likely becoming more popular as GLP-1 users look to stronger products to combat muscle wasting, Danone’s Oikos product has the high-protein benefits that consumers seek.” are doing.” In addition to looking at penetration – or the number of people taking incretin drugs – compliance is also an issue, as many patients stop taking these drugs within a year. “Against the current market backdrop, with more assets coming to market, and with anticipated changes in regulation that may be constructive to deal with, we expect GLP-1 protections for food and beverage will remain important in the sector.” Priya Ohri Gupta, Analyst, Barclays US Consumer Division.