The biopharmaceutical industry has received intense attention from investors over the past two years, boosted by the growing popularity of glucagon-like peptide-1 (GLP-1) drugs for weight loss treatments. However, looking to 2025, UBS expects that in the short to medium term, the sector “will struggle to outperform amid a more uncertain macro backdrop.” Analysts at the Swiss investment bank detailed in a Dec. 18 report that this was due to the current lower interest rate environment and the choice of U.S. President-elect Donald Trump, a vaccine skeptic, Robert F. Kennedy Jr. Lead the Department of Health and Human Services. They wrote: “In the biopharmaceutical space, the GLP topic will continue to dominate, although from a macro perspective, it is uncertain how RFK’s potential leadership will affect the GLP-1 industry.” Analysts noted that Kennedy “due to Financial considerations, publicly criticized proposals to allow government health plans to pay for GLP-1 drugs.” Even so, they expect the market to grow, estimating that the market is currently priced at a “sustainable peak” in GLP-1 sales, ranging from $90 billion to $110 billion. “Given the potential market size, the range of potential outcomes is broad, with the Eli Lilly and Novo Nordisk franchises having the potential to grow through successful pipeline readouts beyond 2031,” they added. Market Leader Eli Lilly and Company and Novo Nordisk have been market leaders in GLP-1 drugs. Shares of Eli Lilly are up about 34.4% since the start of the year, while Danish rival Novo Nordisk is down about 16% so far this year. UBS analysts continue to expect a “duopoly” between the two companies to emerge and sales to increase as production capacity increases in 2025. ” they added in a December report. 18 Note. Eli Lilly and Novo Nordisk both offer injectable weight-loss drugs and are launching pills to support weight management. UBS analysts said the introduction of oral drugs will prove to be “another inflection point” for the industry, noting that it is a more convenient way to take medications. Analysts acknowledge that the two companies face competition from other pharmaceutical companies such as Amgen and Roche, which are also involved in weight loss drugs, but they believe that “penetration will be limited given the entrenched positions of Eli Lilly and Novo.” According to FactSet, 24 of the 31 analysts covering Eli Lilly have buy or overweight ratings on the stock, with an average price target of $1,008.45, giving the stock an upside potential of about 28.8%. . Meanwhile, according to FactSet data, 21 of the 31 analysts covering Novo Nordisk stock have a buy or overweight rating, with an average target price of 922.62 Danish kroner ($129) and an upside potential of 48.1 %. —CNBC’s Michael Bloom contributed to this report.
Where UBS sees weight loss drugs heading in 2025 | Real Time Headlines
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