Overview - Obesity is indeed a significant global health issue. The statistics highlights the alarming rise in obesity rates among both children and adults over the past few decades.
Addressing obesity requires a multifaceted approach, including promoting healthy eating habits, encouraging regular physical activity, and implementing policies that support healthier environments. It's also important to raise awareness about the risks associated with obesity and provide support for individuals trying to achieve and maintain a healthy weight.
Obesity Market Position of India-
Market Growth: The market for anti-obesity drugs in India is expected to grow significantly, with a projected market size of Rs 2,762.7 crore by 2028, and a compound annual growth rate (CAGR) of 10.6% from 2023 to 2028.
Health Implications: Obesity is a growing concern in India, with around 22% of the main population, 23% of the female population, and 11% of children being overweight. This indicates a larger population exposed to weight-related complications in the future.
Product Development: Several Indian pharmaceutical companies are actively involved in
developing anti-obesity drugs. These companies are focusing on research and development, strategic partnerships, and regulatory approvals to introduce innovative therapies targeting obesity.
Demand and Supply: Despite the official unavailability of some expensive weight-loss drugs like Ozempic, Mounjaro, and Wegovy in India, there is a high demand among affluent individuals. Celebrities and wealthy individuals are procuring these medications from other countries.
Market Trends: The anti-obesity drug market in India has seen a significant spurt after the launch of Novo Nordisk's semaglutide (anti-obesity drug) in 2022. The market has tripled in two years, growing at a 32% CAGR to reach Rs 474 crore in January 2024.
Regulatory Considerations: Anti-obesity drugs require a doctor's prescription and are not to be taken without medical supervision. These drugs are beneficial for weight reduction and can also help with heart, kidney, and liver issues.
Effectiveness of Obesity Medications-
The global market for obesity medications is projected to grow over 15 times by 2030. as their application extends beyond weight loss to the treatment of various diseases
The potential of these drugs to enhance longevity could revolutionize healthcare, presenting lucrative investment opportunities in medical technology. By 2035, with up to 7-9% of the population (US and ROW) using these medications, food and beverage brands will need to adapt by offering healthier options and reducing package sizes.
The Beginning & The Effect-
Healthcare Spending: Obese individuals spend more on healthcare annually, but lower obesity rates might not reduce overall healthcare costs due to increased life expectancy
Investment Opportunities: The medical technology sector, particularly cardiovascular devices, may benefit from increased longevity. The outlook for kidney dialysis and orthopedic devices is mixed.
Impact of Obesity Drugs: These drugs could significantly affect healthcare by preventing diseases linked to obesity and reducing the risk of diabetes, heart attacks, strokes, and cardiovascular deaths.
Clinical Trials and Costs: Expanding the use of obesity drugs will require more clinical trials and insurance reimbursement.
Disruption Potential: Obesity drugs have the potential to disrupt healthcare significantly if they impact longevity.
Food Habit Shift & Impact-
Fast food and pizza chains could face long-term challenges as consumers cut back on visits, with limited flexibility for those focusing on pizza or fried chicken. Analysts expect these chains to adapt over time.
Consumption of soft drinks, alcohol, and salty snacks is projected to decline by up to 4% by 2035. However, this may be balanced by the rise of low-sugar or alcohol-free options, smaller packaging, and slower obesity drug adoption especially in emerging markets like India.
Opportunity - As an investor, it's important to consider the future growth rate of obesity, the collective measures for managing it, and the increasing adoption of weight-loss drugs.
Drugs and Balances -
Wight loss Medicines - Oral/Injectable-eg. Semaglutide, Tirzepatide
Protein Balance - Whey Protein, Plant Based Protein powder
Vitamin Balance - Vitamin D3, B12, A, E, Omega 3
Focus on Fitness The fitness industry presents lucrative opportunities as it accelerates in response to these trends
Monitoring - Monitoring health at home using various kits can help you keep track of important health parameters like blood pressure and glucose levels
Food for Thought: Investors should aim to trim the excess from their portfolios and focus on building a healthier, more robust investment strategy
Sources and References*
Indian pharma.cos speed up anti-obesity drug development amidst high demand and Ozempic sales surge - Business Today
India Anti-Obesity Drug Market Competitive Landscape - Edition 2024
https://www.morganstanley.com/ideas/obesity-drugs-food-industry
Anti-obesity drug market gaining traction in India - The Economic Times
https://www.thehindu.com/sci-tech/health/economic-survey-2023-24-rising-obesity-a-concem-preventive: measures-must-be-taken-for-healthier-ifestyle/article68431784.ece
https://www.morganstanley.com/ideas/obesity-drugs-market-expanded-opportunity
https://cse.google.com/
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Disclosure
Disclosure Disclosures as required under SEBI (Research Analyst) Regulations, 2014 Introduction: I am Parag Ashok Gowalkar. Research Analyst registered with SEBI having registration no. INH000014696. I provide research services on equity stocks listed on Indian stock exchanges. Business Activity: The research is based en fundamental analysis. I do thorough research and analysis on fundamentals of companies. As such, I undertake extensive scrutiny of major Company statistics like Balance Sheet, Profit & Loss Account, Key Financial Ratios (ROE, ROCE and Debt to Equity etc.), Quarterly, Half-yearly & Annual Results, Cash Flows, Annual Reports and Shareholding Pattern etc. The referential numbers and the figures in the calculation of the report are available in public domains. Each Company's Business Model, Future Projections and Competitive Advantages are thoroughly checked before recommending their stocks. Risks: Trading and investment in securities are subject to market risks. There are no assurances or guarantees that the objectives of any of trading/investment in securities will be achieved. The names of securities mentioned herein do not in any manner indicate their prospects or returns. The value of securities referred to herein may be adversely affected by the performance or otherwise of the respective issuer companies, changes in the market conditions, micro and macro factors and forces affecting capital markets like interest rate risk, credit risk, liquidity risk and reinvestment risk. Derivative products may also be affected by various risks including but not limited to counter party risk, market risk, valuation risk, liquidity risk and other risks Besides the price of the underlying asset, volatility, tenor and interest rates may affect the pricing of derivatives.
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Neither I nor my relatives/associates have actual/beneficial ownership of 1% or more in securities of the subject company, at the end of the month immediately preceding the date of publication of the document. 3. Neither I nor my relatives/associates have any other material conflict of interest at the time of publication of the document. Disclosure with regards to receipt of compensation: 1. Neither I nor my associates/relatives have received any compensation from the subject company in the past 12 months. 2. Neither I nor my associates/relatives have managed or co-managed public offering of securities for the subject company in the past 12 months. 3 Neither I nor my associates/relatives have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. 4. Neither I nor my associates/relatives have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. 5. Neither I nor my associates/relatives have received any compensation or other benefits from the subject company or third party in connection with the document. General Disclosures: 1. I have not served as an officer, director or employee of the subject company. 2. I am not engaged in market making activity for the subject company "Investments in Securities Market are subject to market risks Read all the related documents carefully before investing "Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors
Parag Ashok Gowalkar
SEBI Registered Research Analyst Reg. No. INH000014696