- Drugs targeting human body protein glucagon-like peptide-1 (GLP-1) prove effective in cutting weight
- Clinical data in 2H23 shows that GLP-1 can also treat heart & kidney diseases, expanding its global potential users by 27% to 1.2b by 2024
- Bullish on global GLP-1 players with market growth to be maintained at 10% in FY24
- Biotech recovery is underway; Pharmaceutical packaging players serving GLP-1 makers will also benefit
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Indication expansion to cardiovascular disease and chronic kidney disease are new catalysts. Drugs targeting human body protein glucagon-like peptide-1 (GLP-1) came into the spotlight in 2021 after a GLP-1 drug was shown to cut body weight by 15% in 68 weeks. These drugs, which were originally intended to help type-2 diabetes patients manage their blood glucose, subsequently gained widespread notoriety on both mainstream and social media as a “blockbuster diet drug”.
But beyond its ability to aid weight loss, a new catalyst for this class of drugs emerged in Aug 2023 when clinical data showed GLP-1 drugs could reduce the incidence of heart attack, stroke, or death from heart disease by 20%. In Oct 2023, positive clinical trial developments indicated GLP-1 drugs could also potentially be used for the treatment of chronic kidney disease. The above developments are highly significant for makers of GLP-1 drugs as they could potentially expand their users by 27% to 1.2b globally by 2024 [these are current statistics in 2024].
FDA approval and clinical trial readout are catalysts for beneficiary stocks. Drugmakers worldwide are actively engaging in R&D to compete for leadership in the largely unsaturated GLP-1 market. We believe FDA approvals and positive clinical trial readout would likely boost the share price of GLP-1-focused drugmakers. This could include the FDA approval of GLP-1 for the treatment of cardiovascular disease and the positive clinical data readout of GLP-1 for the treatment of chronic kidney disease, both of which are expected in 2024. Upstream companies providing pharmaceutical packaging materials to be used for GLP-1 drugs will benefit too, such as providers of syringes and rubber stoppers.
Investor confidence is returning with recovery in biotech funding. With drug developers raising USD6.2b in the US equity capital markets in Jan 2024, the highest since Feb 2021, the recovery of biotech is underway. With more funds to support the R&D of drugmakers, price catalysts from positive clinical data are expected.
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