Tap the Weight-Loss Drug Market With These ETFs

The weight-loss drug market is heating up with the introduction of GLP-1 pills. Novo Nordisk’s NVO Wegovy and Eli Lilly’s LLY Zepbound have been dominating this market and several other companies are also vying for a slice of the lucrative business. The latest data from Roche Holdings RHHBY, Novo Nordisk and smaller biotech proved that an oral option could be as effective as injectables.

The new drugs in the pipeline are getting approval with potential for improvements such as less frequent administration by pill rather than by injection and fewer side effects (patients currently report nausea and vomiting and even more serious side effects such as intestinal blockage).

Investors seeking to tap the boom in weight-loss drug treatments could consider Roundhill GLP-1 & Weight Loss ETF OZEM, Amplify Weight Loss Drug & Treatment ETF THNR and GLP-1, Obesity & Cardiometabolic ETF HRTS.

Weight-Loss Pills Take Center Stage

Last week, Roche’s early Phase 1 clinical trial data showed its pill provided 6.1% weight loss over four weeks. The study's sample size was small, just 12 patients, which is typical of early-stage trials.

Meanwhile, Novo Nordisk and another biotech firm, Terns Pharmaceuticals, also released data last week for their oral GLP-1 candidates. Novo Nordisk's oral candidate beat the company's own injectable weight-loss drug, Wegovy. Patients showed 13.1% weight loss after 12 weeks on the pill, compared to 6% after 12 weeks in Wegovy's early trial. Terns’ data showed its early-stage candidate caused 4.9% weight loss over four weeks, which is in line with competitors. However, the company said it would start the second phase of trials next year. 

According to estimates from analysts at Morningstar and Pitchbook, the market for weight-loss treatment is expected to see 16 new drugs by 2029 that will potentially expand the market size to $200 billion by 2031. Spherical Insights projects the global weight loss supplement market to grow from $28.65 billion in 2023 to $101.83 billion by 2033, at a CAGR of 13.5% (read: ETFs to Profit from the Weight Loss Drug Boom).

Obesity has become a major global health crisis impacting every corner of the world, with more than 1 billion individuals living with obesity. Obesity is linked to numerous health risks, including diabetes, heart disease, stroke and cancer.

GLP-1 medications mimic the effects of the naturally occurring hormone glucagon-like peptide-1, which is produced in the intestine after eating. These drugs were initially used to treat diabetes but were later found to control blood sugar levels, reduce appetite and promote weight loss.

Overall, recent studies have shown that GLP-1 drugs have led to a 10-20% reduction in body weight and lowered the risk of heart attack, stroke and cardiovascular death by approximately 20%.

ETFs to Tap

Roundhill GLP-1 & Weight Loss ETF (OZEM)

Roundhill GLP-1 & Weight Loss ETF is the world’s first GLP-1 ETF and is actively managed. Roundhill believes that weight loss drugs, including GLP-1 agonists, represent one of the most revolutionary advancements in the global pharmaceutical industry. OZEM holds 29 stocks in its basket, with a higher concentration on the top two holdings. 

Roundhill GLP-1 & Weight Loss ETF has accumulated $47.1 million in its asset base since its inception in late May and charges 59 bps in annual fees. It trades in an average daily volume of 34,00 shares (see: all the Healthcare ETFs here).

Amplify Weight Loss Drug & Treatment ETF (THNR)

Amplify Weight Loss Drug & Treatment ETF provides access to global companies involved in the pharmaceutical manufacturing of GLP-1 agonist or enablers of such businesses. It tracks the VettaFi Weight Loss Drug & Treatment Index and holds 27 stocks in its basket, with a heavy concentration on the top two firms.

Amplify Weight Loss Drug & Treatment ETF charges 59 bps in annual fees and has AUM of $4.4 million. It trades in an average daily volume of 3,000 shares. 

GLP-1, Obesity & Cardiometabolic ETF (HRTS)

GLP-1, Obesity & Cardiometabolic ETF seeks to provide long-term growth of capital by investing in GLP-1 and weight loss companies leading the fight against obesity and cardiometabolic diseases. It holds 45 stocks in its basket with a modest concentration on the top firms. 

GLP-1, Obesity & Cardiometabolic ETF has AUM of $88.6 million and charges 75 bps in annual fees. It trades in a volume of 25,000 shares a day on average.

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