Louis Porrini

GLP-1 analogues: trouble ahead for the miracle drug?

Elon Musk, Oprah Winfrey, and Khloé Kardashian swear by them. Over the past 18 months, GLP-1 analogue[1] drugs have caused a revolution in the market for type 2 diabetes and obesity treatment, generating massive profits for the pharmaceutical giants that are behind them. Novo Nordisk, which in 2023 had a higher market capitalisation than the yearly GDP of its home country, Denmark, and US company Eli Lilly, are both skyrocketing. Previously limited to rich countries, obesity has now become a pandemic. Every year, obesity costs 2% of global GDP, possibly reaching 2.9% in 2025[2]. Weight loss is emerging as a major societal challenge. Globally, this could generate revenue of almost 90 billion dollars per year by 2030[3]. In response to the convergence of underlying issues, notably regarding access to healthcare, impact-driven investors have started to engage with these companies.


Positive outcomes for all?

Developed initially for the treatment of type 2 diabetes, GLP-1 analogues are now used to help obese sufferers with at least one weight-related health problem. In just a few months, these treatments have enabled obese individuals to lose around 15% of their body weight, while reducing the risk of cardiovascular disease. For the time being, only Saxenda and Wegovy, developed by Novo Nordisk, and Eli Lilly’s Mounjaro have been approved as anti-obesity treatments by the American Food and Drug Administration (FDA). Though Novo Nordisk’s Ozempic has only been approved for type 2 diabetes, the drug is also known to have been prescribed for the treatment of obesity.

However, drug misuse is a fact. This innovation, both effective and allegedly without severe after-effects, has become increasingly popular with non-target groups, purely for aesthetic purposes. Soaring demand is generating massive shortages, preventing target group patients – and notably diabetics – from accessing vital treatment. Product scarcity also leads to huge price increases. Early 2024, the cost of a month’s treatment with Wegovy[4], or four injections, could reach 1,350 dollars in the United States, compared to 350 dollars on average in Europe. Once again, wealthy individuals – frequently not in target groups – have easier access to the treatment.


Impact-driven investors are engaging the industry

In response to this craze, which could lead to a major crisis with deep repercussions, impact-driven investors have embraced a preventative approach. Forerunners FDE and LBP AM have engaged jointly with two of the market leaders in order to improve practices in the area of human rights, notably regarding access to healthcare and information.

To overcome shortages and support the right to healthcare, private investments are pouring in, to ramp up production and support demand. Eli Lilly, which had already invested a further 160 million dollars early 2024 in its Alsace site and increased the workforce, announced in April the construction of a manufacturing plant dedicated to Mounjaro in Germany. The Danish pharmaceutical firm is on a similar trajectory. Novo Nordisk, which is about to invest 2 billion euros to double the size of its manufacturing site in Chartres, has continued to expand with the acquisition of several production plants in Belgium, Italy and in the United States.

This situation has put the spotlight on general access to healthcare. Recurring shortages are hampering priority patients’ access to the most effective treatments. The key issues of drug availability, and regional and financial accessibility, are core themes addressed by our impact strategy focusing on access to healthcare. We are convinced that innovation backed by impact-driven investors will be the key for the ever-evolving healthcare industry.



Disclaimers: The opinions expressed in this document are the fund manager’s own. LFDE shall not be held liable for these opinions in any way. The stocks referred to are given by way of example. Neither their presence in the portfolio nor their performance are guaranteed. Past corporate earnings or stock performance are not reliable indicators of future earnings or performance and may vary over time.
[1] Glucagon-like peptide-1
[2] Ripple Effects Study, Morgan Stanley, 2024
[3] Goldman Sachs and JP Morgan
[4] Boursorama, 2024