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America’s largest bank is betting in on the craze surrounding Ozempic and other GLP-1s, a class of diabetes and obesity medications known for their weight loss benefits.
JPMorgan Chase’s asset management unit closed a $500 million biotech venture fund. Stephen Qunito, the chief investment officer of the bank’s life-sciences team told Bloomberg that the fund’s “top three choices are obesity, obesity and obesity.”
Demand for GLP-1s has been unrelenting. It’s transformed Ozempic maker Novo Nordisk and Eli Lilly, the maker of Zepbound, into the most valuable pharma companies in the worrldy by market capitalization.
Novo Nordisk is now the 12th largest company in the world with a market cap of $643 billion. Eli Lilly holds the 10th spot at $826 billion.
Morgan Stanley analysts anticipate that the global market for these drugs will reach $105 billion by 2030, up from a previous projection of $77 billion. The investment bank also expects the adoption of these drugs to reach about 31.5 million people in the U.S., about 9% of the nation’s population, by 2035.
“It’s very unlikely that the future of obesity treatment will be dominated by a stable duopoly,” the fund’s managing partner Gaurav Gupta told Bloomberg. “There will be significant winners.”
Several companies are already racing to break up the Novo-Lilly duopoly, including Amgen, Vikings Therapeutics, and Zealand Pharma.
Beyond the health sector, some analysts expect the impact of these slimming drugs will trigger ripple effects across the wider economy, including boosting the fitness industry and reshaping the food sector.
Novo Nordisk CEO Lars Fruergaard Jorgensen even said that chief executives at food companies are calling him for advice regarding the diabetes and weight loss drugs.
“A couple of CEOs from, say, food companies have been calling me,” Jorgensen told Bloomberg. “They are scared about it.”