Hot Stocks: The 3 Best Opportunities for Investing in Weight Loss Drugs

Stocks to buy

Prescription weight loss drugs, like GLP-1 agonists and orlistat, offer effectiveness for some individuals and have proven effects the market has taken notice of. These drugs focus on curbing appetite, which investors in weight loss drug stocks have noticed.

These drugs, combined with exercise and other diet enhancements, have proven effective. However, with FDA approvals for only certain conditions (depending on the label) and Medicare coverage differing by insurance provider, there’s still some uncertainty concerning how this market will shake out.

That said, for those looking to bet on this trend, here are three top weight loss drug stocks to consider.

Eli Lilly (LLY)

Source: shutterstock.com/Michael Vi

First on the list is Eli Lilly (NYSE:LLY), which has been making headlines due to its weight-loss drug Zepbound. In its recent earnings report, LLY stock reached a near-record high and showed resilience despite drug pricing challenges in the market. With a focus on innovative weight loss treatments, this company presents an appealing opportunity for healthcare investors. 

Eli Lilly prides itself on its solid pharmaceutical business, which currently has a value of $700 billion. Lilly’s treatments vary from diabetes to obesity and depression. With LLY stock surging over 30% year-to-date and 129% last year, its anti-obesity drugs notably drove Q4 sales to $9.35 billion, a remarkable 28% increase. The introduction of Zepbound, a new weight-loss injection, added $175.8 million in its inaugural quarter, indicating promising future growth. Moreover, Q4 showed an impressive 13% GAAP earnings per share increase.

While weight loss drugs didn’t entirely drive these results, they certainly played a key role in this outperformance. For those thinking long-term about this space, LLY stock remains the top pick. Mose investors are watching closely.

Roche (RHHBY)

Source: Sundry Photography / Shutterstock.com

Pharmaceutical company Roche (OTCMKTS:RHHBY) ended 2023 dramatically, announcing a $1.3 billion acquisition of Carmot Therapeutics. The company specializes in obesity treatments, marking a boost for Roche stock. Levi Garraway, Roche’s Chief Medical Officer, expressed his plans for potential combination therapies and extensive yet modernized treatment to address obesity.

Berkeley-based Carmot offers two obesity therapies in Phase 2 trials and one oral treatment in Phase 1 trial. Roche’s acquisition included a $2.7 billion cash payment to Carmot shareholders, with up to $400 million in milestone payments. 

The deal integrates Carmot’s 70 employees into Roche. It is expected to close in the first quarter of the following year, positioning Roche to enter the competitive weight-loss and obesity drug market dominated by Novo Nordisk and Eli Lilly.

Regeneron Pharmaceuticals (REGN)

Source: madamF / Shutterstock.com

Currently sporting a $100 billion market cap, Regeneron Pharmaceuticals (NASDAQ:REGN) also offers an extensive portfolio of critical treatments, such as Dupixent. Experts see REGN with a one-year price target between $710 and $1,184 per share. Regeneron shows excellent and stable growth potential that is perfect for investors looking for long-term stocks.

Regeneron also won its appeal in the company’s ongoing case with Novartis. The case was about its anti-VEGF eye treatments, Lucentis and Eylea. The claims against Novartis were reinstated, and Circuit Judge Barrington Parker decided to lower the court’s error from considering vials of the same market.

Despite an IPR&D charge, the company’s GAAP earnings per share surged to $8.89. CFO Robert E. Landry highlighted robust execution and pipeline advances. If the company can continue to make headway into the weight loss drugs market, REGN stock could be an enticing choice for investors.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Articles You May Like

7 Meme Stocks to Sell in April Before They Crash & Burn
Hidden Treasures: 3 Stocks Poised for 10X Returns by 2027
3 Cannabis Stocks on the Brink of a Massive Breakout
If You Can Only Buy One EV Charging Stock in April, It Better Be One of These 3 Names
If You Can Only Buy One Fintech Stock in April, It Better Be One of These 3 Names