We recently published a list of 10 Best Weight Loss Drug Stocks to Buy According to Analysts. In this article, we are going to take a look at where GSK plc (NYSE:GSK) stands against other best weight loss drug stocks to buy according to analysts.
Global Surge in Obesity Medication Market Driven by GLP-1 Drugs
Most people have tried to include fitness and weight loss into their everyday routines. Due to the immediate physical and psychological benefits of increasing one’s fitness, the weight loss and fitness sector is rather large globally. The WHO estimates that over one billion individuals worldwide—650 million adults, 340 million adolescents, and 39 million children—are obese. A brand-new class of weight-loss drugs that don’t require rigorous diets or exercise routines appears to be ground-breaking. These innovative drugs can help people who are overweight or obese shed 15% to 20% of their body weight. According to Andy Acker, portfolio manager at Janus Henderson Investors, “This may be the largest opportunity we’ve ever seen in the pharmaceutical industry.” Medication for weight loss is very popular. Investors are comparing the US top in weight-loss medications with the leading in artificial intelligence chips.
Morgan Stanley Research has increased its prediction for the global market for obesity medications from $77 billion to $105 billion by 2030 in light of this demand increase. In 2023, brand-name obesity drugs brought in almost $6 billion.
According to Forbes, Semaglutide, a market leader for obesity drugs and the generic version of Ozempic, Wegovy, and Rybelsus, was the most prescribed Glucagon-Like Peptide-1 GLP-1 agonist in 2023. Nearly 88% of all new prescriptions were for it. Tirzepatide, Liraglutide, and Semaglutide are the only three GLP-1 weight-control drugs currently approved by the FDA.
According to JP Morgan Research, obesity and diabetes will drive the GLP-1 market’s growth to $100 billion by 2030. By that year, there may be 30 million GLP-1 users in the US or around 9% of the total population. Increased demand for obesity medications will benefit some industries, such as biotech, while posing problems for others, such as the food and beverage sector.
Chris Schott, a Senior Analyst with expertise in the U.S. Diversified Biopharma sector, claims:
“GLP-1s have been used to treat T2D since 2005, starting with the approval of Byetta, with follow-on products continually improving on efficacy. The most recent, Ozempic and Mounjaro, offer significant advantages over previous products and have accelerated class growth,” “Indeed, the newest generations of GLP-1s and combos lead to 15-25+% weight loss on average, well above prior generations of products.”
Challenges and Accessibility Issues in the GLP-1 Weight Loss Medication Market
The latest generation of GLP-1 medications are being hailed by some as “miracle drugs” that can cure obesity. However, not all obese persons can utilize GLP-1s due to their high cost and restricted insurance coverage. At the current rate, treating 40% of obese Americans would cost more than $1 trillion annually, according to Jonathan Gruber, an economics professor and the chairman of MIT’s economics department. That is nearly equal to what the government spends on Medicare as a whole. That is a startling amount.
The usage of GLP-1 drugs, such as semaglutide, for weight loss has increased over the past decade, whereas among those with type 2 diabetes, it has decreased by roughly 10%, per a report published in the Annals of Internal Medicine. The prolonged medicine shortage that results could restrict diabetics’ access to the treatments, the experts caution. As the need for obesity drugs rises, it is imperative to guarantee that diabetic patients have access to GLP-1 medicines, stressed Dr. Yee Hui Yeo, a clinical fellow in Cedars-Sinai’s Karsh Division of Gastroenterology and Hepatology.
The FDA says the shortages are a result of rising demand. The GLP-1 medication scarcity is a “major public health concern” that is unlikely to be addressed in 2024, according to the European Medicines Agency, suggesting that the shortages are not limited to the US. NPR reports that some people with diabetes have had to cut back on the number of drugs they can take due to shortages that have made it difficult for them to have their prescriptions filled.
Julia Angeles of Baillie Gifford, Debra Netschert of Jennison Investments, and Gentry Lee of Fayez Serofim were among the panelists on “Weighing the Future of Obesity Drugs,” which discussed the potential of GLP-1 medications, which were initially developed to treat diabetes but are now being used to treat obesity. The evolution of GLP-1 medication delivery from weekly dosages to several daily injections was also noted by Netschert, who also emphasized current attempts to further reduce injection frequency and minimize adverse effects. Notwithstanding their remarkable effectiveness, 1.5 million of the 110 million eligible patients in the US are currently undergoing treatment with GLP-1 drugs, according to Netschert, because of supply constraints.
In their dispute over who should pay, Angeles claimed that the majority of patients paid cash, while Netschert cited large insurance and Medicare/Medicaid reimbursements. Up to 700 million individuals worldwide may need these drugs outside of the United States, according to Netschert. Notably, the panel discovered that the UK had the fastest approval rate of GLP-1 drugs of any nation, demonstrating the recognized worth of these drugs. In general, UK payors are strict.
Our Methodology
For this article, we selected stocks that demonstrated over 10% analyst upside, had a market cap above $2 billion and were backed by strong institutional ownership. We then ranked these stocks based on their price target upside.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is GSK plc (GSK) the Best Weight Loss Drug Stock to Buy According to Analysts?
A doctor and a patient discussing a therapy plan that includes pharmaceutical products.
GSK plc (NYSE:GSK) develops and markets a wide range of healthcare products, including vaccines, specialty medicines, and general medicines. Its portfolio includes prescription drugs, over-the-counter medications, and vaccines targeting a variety of diseases and conditions.
GSK plc (NYSE:GSK) has been involved in the weight loss market with its over-the-counter product, alli (orlistat 60 mg), which was approved by the European Commission in 2009 as the first non-prescription weight loss aid in Europe. Alli works by preventing the absorption of some dietary fat in the digestive system, helping users lose 50% more weight when combined with a reduced-calorie diet. Despite initial success, Alli has faced challenges, including declining sales and a 2014 recall in the U.S. and Puerto Rico. The corporation continues to invest in weight management solutions and supports obesity-related research and consumer programs, positioning itself as one of the best weight loss drug stocks.
For fiscal Q4 2024, GSK plc (NYSE:GSK) released impressive financial results that showed a robust increase in all important parameters. In 2024, its core operating profit increased by 13% while its sales increased by 8% to nearly £31 billion. Core profits per share (EPS) increased by 12% as well.
GSK plc (NYSE:GSK)’s Specialty Medicines business saw a 19% increase in sales, which was credited with this success. Its oncology revenues almost doubled to over £1.4 billion in 2024, while its HIV sales increased by 13%. With five new product approvals expected in 2025 and 11 successful phase III studies reported in 2024, the company is steadily bolstering its pipeline. These include depemokimab for severe asthma and Blenrep for multiple myeloma.
Overall, GSK ranks 5th on our list of best weight loss drug stocks to buy according to analysts. While we acknowledge the potential of GSK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GSK but that trades at less than 5 times its earnings, check out our report about thecheapest AI stock.
