Let's chat about Ozempic – the superhero we didn't know we needed until now!
As we celebrated World Diabetes Day on November 14th, let's take a moment to appreciate the Ozempic phenomenon. It's not just a drug; it's behaving as a catalyst for change and disruption in many industries (Yep, beyond just healthcare and life sciences).
But first, a quick Ozempic 101: It is a Novo Nordisk drug. Branded under Ozempic for the Semaglutide medicine. Semaglutide
falls under a drug class called GLP-1 agonists, which mimic GLP-1 receptors in the body and produce more insulin, helping to lower blood sugar levels and decrease appetite. Ozempic is a revolutionary drug that has been shown to have multiple benefits for people with type 2 diabetes and obesity. It is not only effective in lowering blood sugar and A1C levels, but also in reducing the risk of major cardiovascular events and promoting weight loss. But Ozempic is disrupting seemingly unrelated industries, not just diabetes care!
Now, why is Ozempic making waves? Here are some examples:
- ?? Pharmaceutical industry: Ozempic is one of the best-selling drugs in the world, with sales of Ozempic and Wegovy reaching $4.8 billion
in a single quarter. It is challenging the dominance of other diabetes drugs, such as metformin, and creating a new standard of care for patients. It has also shown promising early results in other conditions, such as chronic kidney disease
, significantly expanding its market potential. Ozempic can help people lose 15-20% of their body weight (as compared to <5% for earlier standard of care drugs), while also regulating their insulin secretion and blood sugar levels. And just as a reminder, obesity is THE biggest epidemic we are facing today. Obesity rates have shot up the world over. For example, ~10% of US adults were obese in the 70s, which stands at a staggering 42% now and growing. And the weight reduction aspect is where things get interesting as suddenly Ozempic can create a significant impact on the care for not just diabetes but many other conditions, (and other industries as well as we will discuss shortly).But another quick data point before we go further. Morgan Stanley estimates that 7% of the US population (24M) will be taking Ozempic or similar drugs by 2035!
Just let that data sink in.
- ??MedTech: Seemingly the most hard hit sector by Ozempic in the short term. Ozempic reduces the reliance on devices and equipment for diabetes and obesity management. There has been a ~15 to 20% decline in the stocks of key MedTech players and sector ETFs since July. From diabetes (insulin pumps) and sleep apnea device manufacturing companies to cardiovascular devices' organizations have been impacted. And most recently, the CKD (chronic kidney disease) devices' companies due to the recent positive Ozempic CKD trial updates
. One exception to this could be CGM (continuous glucose monitor) companies - specially those with remote monitoring abilities (read: IoT) as the hypothesis is that with stronger awareness patients will continue to adopt CGMs as they can provide real-time feedback and convenience for Ozempic users. An interesting adjacency is the knee replacement procedure. This space is expected to grow in the near term as patients become more aware and eligible for such replacements (thanks to loosing weight due to Ozempic), but the cumulative requirement for such procedures might reduce in the long run due to the weight reduction at a massive scale among the relevant patient population (if that happens). Before we move beyond Life Sciences industry, it is worth noting that there are more than 350 clinical trials on Semaglutide
, of which more than a 100 are actively recruiting patients for different conditions including Alzeimers and various cancers. Early days, but just imagine the positive impact Ozempic will create in our society if even a fraction of those trials are successful.
- ?? Food industry: Ozempic is influencing the food choices and preferences of consumers, who are becoming more aware of the impact of nutrition on their health and weight. Ozempic works by mimicking a natural hormone that regulates appetite and digestion, making people feel full longer and eat less. Ozempic is also encouraging the development and consumption of healthier and low-calorie foods, such as plant-based and high-protein products. This can be seen in the decline of fast food chains, such as McDonald’s, whose shares have dropped by 16% since the launch of Ozempic in 2017. Morgan Stanley believes that as more people in the U.S. use obesity drugs, overall consumption of carbonated soft drinks, baked goods and salty snacks may fall up to 3% by 2035
. But remember, correlation is not causation! Many experts believe that fast food chains and carbonated drink manufacturers will be impacted
in the long run, but there are many who believe that Ozempic users, especially those paying out-of-pocket (anywhere between 900 to 1700 USD per month in the US), are not the target customers of McDonald’s and other such food joints to be able to cause any meaningful dent.
- ??? Fitness industry: Ozempic is motivating people to adopt a more active and fit lifestyle, as part of their diabetes and weight management plan which could lead to a growth in that industry according to some experts.
- ??Cosmetic industry: Ozempic is also having an impact on the cosmetic industry, as it changes the appearance and self-image of people who use it. Ozempic can cause a noticeable weight loss in the face (read: Ozempic Face
), which can make people look younger and more attractive, but also more wrinkled and saggy. This can increase the demand for face lifting procedures, such as botox and fillers, to smooth out the skin and restore the volume. Ozempic can also affect the hair growth and texture, as it alters the hormonal balance and blood circulation in the body. This can lead to hair loss or thinning, or hair growth in unwanted areas, such as the chin and upper lip. This can create a need for hair restoration or removal treatments, such as hair transplant or laser therapy.
- Others: If a sizeable portion of population becomes more aware about diabetes and obesity, and are able to lead a more active lifestyle and/or shed a few extra pounds, the impact to seemingly unrelated industries such as recreation, entertainment and travel could be huge in the long run.
Ozempic is reshaping the way we think about and treat diabetes and obesity, and creating new opportunities and challenges for businesses and consumers alike across industries. However, Ozempic is not a magic pill, and it has its own limitations and possible side effects, such as nausea, vomiting, diarrhea, and pancreatitis. Ozempic is also in short supply, as the demand is much higher than the production capacity, and there is no clarity on when the situation will balance. I must add that Ozempic is a remarkable innovation, but not a magic potion, and it requires careful and responsible evaluation and use - Consult your doctor for expert advice before starting a new treatment, always.
So what's your take on Ozempic's grand impact into different worlds? Share your thoughts and opinions below. ??
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