Weight loss drugs Wegovy and Mounjaro could spawn a wide range of latest piggyback product lines

LONDON — The rapid rise of weight-loss drugs reminiscent of Wegovy and Mounjaro is giving rise to quite a few latest product lines as corporations hope to land on the correct side of disruptive change in healthcare.

Industries starting from food and beverage to retail and fitness have come under the highlight as demand for Novo Nordisk and Eli Lilly's so-called miracle drugs soars amid fears they may dramatically change consumer behavior.

However, some corporations say they welcome the new-found market opportunities.

Dutch biotechnology company DSM Firmenich told CNBC on Wednesday that it’s looking into dietary supplements to enhance and offset a few of the effects of weight-loss drugs, with CEO Dimitri de Vreeze calling it the natural evolution of the industry.

“If you want to lose weight and succeed, you move on to health, nutrition and lifestyle, because basically you want to carry on as you have been doing. And that's where we come in,” de Vreeze told CNBC's “Squawk Box Europe.”

The weight reduction injections are based on a bunch of medicine called GLP-1 (glucagon-like peptide 1) receptor agonists. They work by mimicking a naturally occurring gut hormone that helps regulate appetite within the brain.

Studies are ongoing into other health applications and possible negative effects of appetite suppressants, but De Vreeze said his company can also be looking into products to extend muscle maintenance and protein absorption.

“There are some side effects of weight loss drugs and that means it's harder to build muscle and keep protein levels up. And that's where we come in. We use ingredients and develop ingredients that kind of compensate for that,” he said.

Novo Nordisk and Eli Lilly didn’t immediately reply to CNBC's request for comment.

DSM will not be the one company trying to capitalize on the growing weight-loss drug market.

Swiss food giant Nestlé announced last month that it could launch a brand new frozen food range aimed toward GLP-1 drug users. The Vital Pursuits range, which can initially comprise 12 items including wholegrain bowls and pizzas, is designed as a dietary “companion” to the medication, the corporate said. said.

CEO Mark Schneider told CNBC last week that while weight-loss drugs are changing consumer behavior, “the need for nutrients is not going away.”

GLP-1 drugs are “certainly an interesting addition to all the other needs we are trying to meet in the food industry,” Schneider said.

Danone CEO Antoine de Saint-Affrique also told CNBC in April that he viewed GLP-1 as a “complement” to the French food group, adding that it could only increase demand for its food products.

However, in line with analysts at Barclays, it will not be yet clear whether consumers are roughly inclined to decide on healthy products because they take weight reduction medication.

“Greater adoption of GLP-1 drugs could be viewed as replacements for food categories that are more focused on health and wellness,” analyst Andrew Lazar said in a research note last 12 months.

“This means consumers may also eat more weight-control foods as they seek to eat healthier and use such products instead of more indulgent snack alternatives,” he added.

Such changes could have similar effects on restaurants, grocers and delivery services that “proactively” adapt to using the drugs, the bank's analysts added. They cited fast-food corporations reminiscent of KFC's Yum Brands and Shake Shack as potential beneficiaries if consumers see the drugs as “compensation” for such indulgences.

Airlines could also profit from the rise in passenger numbers as they increasingly seek to scale back fuel costs. In a report from September note According to Bloomberg, Jefferies analyst Sheila Kahyaoglu said United Airlines would save $80 million per 12 months if the common passenger weight were reduced by 10 kilos.

Even pharmaceutical packaging corporations may benefit, Barclays said, with corporations reminiscent of Germany's Gerresheimer seeing a two to 4 percent increase in sales from the weight-loss drug market, which is estimated to be value $100 billion.

It will not be yet clear whether such supplements can replicate the meteoric rise of weight-loss drug makers reminiscent of Novo Nordisk and Eli Lilly.

“We think it is too early for investors to take a definitive position on the impact of GLP-1 drugs outside of healthcare stocks, and the range of possible scenarios is very wide,” Barclays analysts wrote.

When asked whether the increasing demand for food could be reflected in his company's share price, de Vreeze admitted that it was “too early” to make such an announcement.

“This is something that has to be built over time. It's in the pipeline. But as soon as something changes, you'll see it reflected,” he said.

The latest products come at a time when other pharmaceutical corporations are hot on the heels of Novo and Eli, attempting to grab a chunk of the load loss pie.

In China, a key marketplace for the drug, about 15 generic versions of Ozempic and Wegovy are currently being developed, in line with clinical trial records. quoted by Reuters on Thursday.

Meanwhile, some analysts have also expressed caution concerning the continued growth of the load loss drug market.

“We don't necessarily believe that miracle cures will remain miracle cures forever,” Guillaume Menuet, head of investment strategy and economics for EMEA at Citi Wealth, told CNBC on Thursday.