Several weight-loss drug stocks are sliding today as pharmaceutical companies battle for dominance in the booming GLP-1 market — which is projected to hit $105 billion by 2030, according to Morgan Stanley (MS-2.09%) analysts.
GLP-1 drugs, also known as incretin treatments, were made famous by Novo Nordisk’s (NVO+2.27%) Ozempic. They mimic hormones that regulate blood sugar and suppress appetite, fueling unprecedented demand. Novo Nordisk and Eli Lilly (LLY-2.66%) currently dominate the space, but rivals are scrambling to carve out their share.
Some companies, like Zealand Pharma and Roche (RHHBY-1.49%), are developing next-generation treatments with stronger weight-loss effects. Others, like Hims & Hers (HIMS-6.34%), betted on more affordable off-brand versions — an approach that thrived during shortages of branded medications but now faces stricter regulatory hurdles.
Shares of Zealand Pharma and Roche fell 11% and 2%, respectively, on Thursday morning — just a day after popping on news of their collaboration to develop new weight-loss treatments.
Zealand announced a partnership with Roche to co-develop and commercialize its experimental drug petrelintide, including a potential combination with Roche’s, CT-388.
As part of the deal, Zealand will receive $1.65 billion upfront, with the total package potentially reaching $5.3 billion if development and sales milestones are met. Roche will handle commercial manufacturing and supply.
“We now hold a more bullish view on the prospect of petrelintide emerging as an important therapeutic intervention for chronic weight management,” William Blair analyst Andy T. Hsieh wrote about the deal in a note Wednesday.
Zealand previously reported that patients taking a high dose of petrelintide over 16 weeks lost an average of 8.6% of their body weight. For comparison, Novo Nordisk’s Wegovy led to an average 15% weight loss over 68 weeks in clinical trials.
Roche, a 127-year-old pharmaceutical giant, made its first major move into the weight-loss drug market in 2024, when it acquired Carmot Therapeutics for $2.7 billion. That deal brought in three obesity drug candidates, including CT-388, which showed promising results in early trials — patients lost 18.8% of their body weight on average after 24 weeks.
Hims & Hers, the telehealth company catering to millennials, saw its stock drop nearly 5% Thursday morning.
The company jumped into the GLP-1 market last May, offering compounded semaglutide — an off-brand version of Ozempic. The move paid off as Hims & Hers’ total sales surged 69% last year to $1.5 billion.
But now, the regulatory landscape is shifting. The U.S. Food and Drug Administration (FDA) recently announced that shortages of popular GLP-1 drugs like Wegovy and Eli Lilly’s Zepbound are officially over. With branded medications now deemed “fully available,” the agency plans to crack down on compounded versions that closely mimic FDA-approved drugs.
Earlier this week, the FDA clarified its policies, giving companies like Hims & Hers until May 22 to stop selling compounded GLP-1 medications that are essentially identical to commercial versions.
Still, Hims & Hers has other avenues to explore. The company could continue to offer more personalized semaglutide formulations and shift its focus to older generic weight-loss drugs.
The post Hims & Hers, Zealand, and Roche — why these weight loss drug stocks are down today appeared first on Quartz.
