The World Obesity Day, observed on March 4th, has recently reminded us that the number of severely overweight individuals worldwide is rapidly increasing. According to a report by the medical journal „The Lancet", globally, more than 1 billion people are suffering from obesity, with around 2.5 billion classified as overweight. The number of affected individuals has doubled since 1990 and quadrupled among adolescents aged between 5 and 19 years. The World Health Organization (WHO) refers to it as an epidemic. Weight loss injections, currently celebrated as almost miraculous in the fight against obesity, feature a promising active ingredient originally developed for diabetes. It could become a new gold standard in medicine.

The success of new therapy approaches against obesity is electrifying the Swiss financial service provider Bellevue Asset Management as well. „The treatment of obesity benefits from strong political support and simultaneously above-average growth potential like hardly any other area", says portfolio manager Christian Lach.

In diabetes therapy, insulin has been considered the gold standard for over 100 years. However, it has long been known that other digestive hormones also play an important role in conjunction with insulin, explains Lach. Type 2 diabetes is associated with a metabolic disorder in which the body's communication with various signals is disrupted. „Muscles and liver become resistant to insulin, the pancreas produces more and more insulin, leading to a chain reaction: rising blood sugar levels, vascular damage, and damage to the heart and kidneys. If obesity and high blood lipid levels are also present, fatty liver develops, increasing the risk of diabetes", states Lach, who holds a PhD in biochemistry. For obese individuals, the risk of developing more than 200 diseases is elevated, with Type 2 diabetes being among the most well-known.

The medication class celebrated euphorically in connection with weight loss injections, which was developed by pharmaceutical giants Eli Lilly and Novo Nordisk, mimics the effect of the body's own digestive hormone GLP-1. „GLP-1 encourages the pancreas to produce more insulin while simultaneously making muscle tissue and the liver more sensitive to insulin – which is the more important effect", notes Lach. Therefore, the GLP-1 medication class was initially developed and approved for diabetes. Only years later, in 2024, did the first approval against obesity follow.

The market is fiercely competitive. German pharmaceutical company Boehringer Ingelheim is also collaborating with Danish biotech company Zealand Pharma on a medication against obesity in a similar drug class. Swiss pharmaceutical company Roche is re-entering the weight loss medication market with the acquisition of Carmot Therapeutics for at least 2.7 billion dollars. In late February 2024, Californian Viking Therapeutics also attracted attention with an experimental weight-loss medication that showed remarkable efficacy in a mid-stage study.

The broad impact of the medication class was initially underestimated. Initially, some observers claimed that weight loss was induced by the side effects of the diabetes medication. The drug causes nausea, vomiting at worst, and patients, therefore, lose their appetite. „Ten years later, it was proven that it's not just the weight effect", says Lach.

„The famous Select study by Novo Nordisk in 2023 showed that the active ingredient semaglutide reduced the mortality of obese patients with pre-existing conditions by 19%. Diseases such as heart attack, stroke, and heart failure decreased by a combination of 20%. The risk of developing diabetes decreased by 70% with GLP-1 therapy", summarizes Lach the central study results.

Improvements were also observed in the participants' kidney function, blood sugar and lipid levels, as well as inflammation markers. „This was a surprise because the efficacy of semaglutide in terms of mortality is comparable to that of very good heart medications. This is astonishing for a weight loss and diabetes medication", explains Lach. Lach also finds it noteworthy that the positive health effects were observed in the study before the completion of weight loss.

The positive study results were the starting signal for Bellevue Asset Management to offer its own product, the Bellevue Obesity Solutions Fund. „For the first time in the history of medicine, we can help overweight or obese high-risk patients not only reduce weight but also improve many health parameters", states Lach. For the first time in history, medications are achieving a level of weight loss that previously could only be attained through surgery, such as gastric reduction or bypass.

Bellevue Asset Management's Obesity Fund does not just focus on the providers of active ingredients. Instead, it encompasses the entire value chain, including medication, packaging, distribution, and even lifestyle companies offering services such as nutritional coaching, fitness programs, and specialized sports products. It is now also known that the reward centre in the brainstem of obese individuals shows typical patterns of addiction disorders. „This makes it clear that obesity is not behavioural.“

Obesity is now officially recognized as a chronic disease. „There is enormous momentum in this field; many downstream health restrictions and accompanying diseases can be improved by addressing the underlying problem of obesity.“

For Lach, it is difficult to understand why the medication class is also placed in the lifestyle niche in public opinion. In his view, it's sensationalism. GLP-1 antidiabetics may also curb appetite, create a better feeling of satiety, and activate metabolism and the intestines. However, they are medications with side effects: „It's no fun.“ Enjoying a social gathering at dinner is hardly possible after the weight loss injection; typically, one loses appetite after the appetizer.

„Our investment idea is the medically indicated area", clarifies Lach. „And this segment is huge.“ Worldwide, the WHO classifies 40% of people as overweight and obese, in the US, more than 70% of the population. „Policy-makers are aware of the direct and indirect follow-up costs: They are estimated globally to reach 4 trillion dollars by 2035", says Lach. Given the high economic relevance, there is political support. „Many international organizations such as WHO and UNICEF are working with states to develop programs to counteract – preferably starting in childhood.“

The GLP-1 market was around 36 billion dollars in 2023. The momentum has just begun. Lach expects the market volume to reach 100 billion dollars by 2030. In early March, Novo Nordisk impressed with an optimistic outlook for their pipeline candidates at its capital markets day. As a result, revenue forecasts for the global obesity market increased significantly.

The limiting factor is production capacity – for now. Here, the manufacturers of weight loss injections are going all out and investing worldwide in new facilities to meet the high demand. In early February, Novo Nordisk also announced the acquisition of US contract manufacturer Catalent for 16.5 billion dollars, which already fills injection pens for the Danish company.