Novo Nordisk’s weight-loss drug Wegovy is experiencing a surge in popularity.
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But some companies say they are eager to take advantage of newfound market opportunities.
Dutch bioscience company DSM Firmenich told CNBC on Wednesday that it is researching dietary supplements that could complement and complement some of the effects of weight-loss drugs, with CEO Dimitri de Vliese saying it’s a natural progression for the industry.
“Once they’ve started losing weight and are successful, they move on to the health, nutrition and lifestyle counters because they basically want to maintain that weight, and that’s where we come in,” de Vries told CNBC’s Squawk Box Europe.
Weight loss injections rely on a class of drugs called GLP-1 receptor agonists (glucagon-like peptide 1), which work by mimicking a natural gut hormone in the brain that helps regulate appetite.
Further health applications and potential side effects of appetite suppressants are still being researched, but de Vries said his company is also looking at products to increase muscle retention and protein intake.
“Weight loss drugs have side effects, they make it harder to build muscle, they make it harder to maintain protein levels, and that’s where we come in. We use ingredients and develop ingredients that compensate to some extent for those side effects,” he said.
Novo Nordisk and Eli Lilly did not immediately respond to CNBC’s requests for comment on the remarks.
DSM isn’t the only company looking to cash in on the growing market for weight-loss drugs.
Swiss food giant Nestle announced last month that it would launch a new frozen food series targeted at people taking GLP-1 drugs. The company said the “Vital Pursuit” series, which will initially feature 12 items such as whole-grain bowls and pizzas, has been developed as a dietary supplement to the drugs. Said.
Chief Executive Officer Mark Schneider told CNBC last week that while weight-loss drugs are changing consumer behavior, “nutritional needs aren’t going away.”
GLP-1 drugs “will certainly be an interesting addition to all the other needs that we’re trying to fill in the food industry,” Schneider said.
Danone CEO Antoine de Saint-Afrique also told CNBC in April that he sees GLP-1 as “complementary” for the French food company, adding that it will only increase demand for its nutritional products.
But Barclays analysts say it remains to be seen whether weight-loss drugs make consumers more or less likely to choose healthier foods.
“The growing adoption of GLP-1 drugs could be seen as a more health and wellness conscious food alternative,” analyst Andrew Lazar wrote in a research note last year.
“However, it may also lead to consumers eating more weight-management foods as they aim to eat healthier and replace more indulgent snack foods with such products,” he added.
The bank’s analysts added that the change could have a similar impact on restaurants, food retailers and delivery companies that have “aggressively pivoted” to accommodate drugs. Fast-food companies such as KFC Inc. Yum Brands Inc. and Shake Shack Inc. could benefit if consumers see drugs as an “offset” for those preferences, the bank said.
Airlines are increasingly interested in reducing jet fuel costs and stand to benefit greatly from the decline in passenger numbers. Note Jefferies analyst Sheila Kahyaoglu, quoted by Bloomberg, said United could save $80 million a year if its average passenger weight dropped by 10 pounds.
Barclays said drug packaging companies could also benefit, with companies such as Germany’s Gerresheimer expected to see a 2-4 percent increase in revenue from the estimated $100 billion weight-loss drug industry.
It’s not yet clear whether such supplements can replicate the rapid growth of weight-loss companies like Novo Nordisk and Eli Lilly.
“We believe it is premature for investors to take any definitive positions on the impact of GLP-1 drugs outside of healthcare stocks, and the range of possible scenarios is very wide,” Barclays analysts wrote.
Asked whether growing demand for nutritional products was being reflected in his company’s share price, de Vries acknowledged that it was “too early to say.”
“This is something that will need to be built over time. It’s a work in progress. But the minute the change happens, you’ll see it reflected,” he said.
The new product comes as other drug companies are chasing Novo and Eli to grab a share of the weight-loss drug market.
In China, the drug’s main market, about 15 generic versions of Ozempic and Wegovi are currently in development, according to clinical trial records. Quote Reuters reported on Thursday.
Meanwhile, some analysts are also expressing caution about the continued growth of the weight-loss drug market itself.
“I don’t necessarily think that ‘miracle’ drugs will remain miracle drugs forever,” Guillaume Menuet, EMEA head of investment strategy and economics at City Wealth, told CNBC on Thursday.
