Diabetes-related stocks take hit over weight loss drug craze
Weight loss drugs, like Novo Nordisk's (NVO) Ozempic, have become popular across healthcare providers in regard to diabetes treatment. Although use is limited due to affordability, shares of diabetes drugmakers (DXCM, PODD, TNDM) have seen declines while Ozempic has been a favored choice for consumers.
Yahoo Finance Health Reporter Anjalee Khemlani explains the growing hype around the drugs and provides insight into what it means for the future of diabetic patients, while also commenting on the demand drops for insulin pumps and glucose monitors.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
JULIE HYMAN: Anj, we've been talking about this for a while, and it just feels like the drumbeat is getting bigger and the ripple effect is getting wider.
ANJALEE KHEMLANI: Yes and no. So definitely starting to see a lot of attention and focus more on what exactly the fallout is going to be of this increase in use. We know that, of course, use is still limited by insurance and by employers willing to pay for some of these drugs, but what we do know is that with their rising popularity, there has been concern about certain companies being impacted, and that's insulin pumps, that's continuous glucose monitoring, and other medical devices.
We've also seen reports of decrease in bariatric surgery, so all of these things just sort of feeding to the idea, of course, that these drugs are getting more attention, more people willing to try them, at the least Ozempic for type two diabetes and Wegovy when it was made available for weight loss.
But we've seen also a little bit of reversal of that concern. You're seeing from Jefferies some notes that give you some idea of that. One note said, quote, "We only see potential for modest drag or no drag on the insulin pump opportunity, and view that offer opportunity for continuous glucose monitoring as unimpaired or even helped by GLP-1s." Those are those Semaglutide, Wegovy, and Ozempic drugs, as well as Manjaro, and those drugs are actually helping to enhance monitoring and help those patients actually continue to do a better job of being compliant with their use.
There have been, of course, some studies that have looked at whether or not eventually over time, diabetes patients would be weaned off of insulin as a result of use of these, but there's also others that look at bariatric surgery paired with Ozempic and the benefit there, and the opportunity for type one diabetes is not impacted by these drugs, so there is still opportunity for these.
In another note, Jefferies cleverly called these stocks that have been under pressure as being, in quote unquote, "GLP-1 jail", saying that, "Given sentiment overhangs around GLP-1s, we are realistic in thinking it may take some time for these stocks to be released from, quote, 'GLP-1 jail'." So, you know, with, of course, the frenzy of interest, we're starting to see some of that waning and sort of some of that reality check sort of playing a role.
- And, Anjalee, related to these weight loss drugs there have been these findings from the Jama Medical Journal pointing to some health risks, what can you tell us there?
ANJALEE KHEMLANI: That's right. Ongoing look at long term effects of these drugs or how exactly they're impacting the body, a new one looking at what's known as stomach paralysis, or that is the stopping of processing of food in the stomach. Meanwhile, there's also been another recent study in the last few weeks looking at the digestive tract and sort of stopping the function there. So while these drugs do slow down, you know, the digestive process, they could slow it down too much, and so those are some of the concerns that are coming to light adding to the additional side effects we know that are continuing to be monitored.
