Carol Yepes/Moment via Getty Images
The growing demand for the GLP-1 class of anti-obesity medications, developed by Novo Nordisk (NVO) and Eli Lilly (LLY), could potentially shape the market for weight loss surgeries in the long term, according to a recent research note by Bernstein.
Redefining the Market Dynamics
Name the Lilly and Novo treatments marketed as Wegovy and Zepbound, respectively, for obesity, has long been seen as a factor contributing to a decrease in the number of bariatric procedures performed to aid patients in shedding weight.
Referring to a survey of 50 bariatric surgeons in the U.S., Bernstein analysts led by Lee Hambright pointed out that since the hype of GLP-1 drugs began, the average number of weight loss procedures has fallen by approximately 11%.
The Industry Pulse
Major players in the market, including Intuitive Surgical (NASDAQ: ISRG), Medtronic (NYSE: MDT), and Johnson & Johnson (NYSE: JNJ), have reported similar observations.
Shares of Intuitive Surgical (ISRG), Medtronic (MDT), and ReShape Lifesciences (RSLS) experienced a downturn in October after JNJ CEO Joaquin Duato highlighted the near-term impact of GLP-1s on weight loss surgeries.
Uncharted Territory
Despite the short-term pressure on surgery volumes, Bernstein argues that there is still no consensus on the extent of the long-term impact. “Drawing a conclusion that the rise of weight loss meds will come at the expense of bariatric procedures may be premature,” they added.
Although there are uncertainties about the future demand for GLP-1s concerning affordability, coverage, side effects, and long-term drug adherence, analysts believe that weight loss surgeries are becoming safer, faster, more effective, and less expensive.
Expanding Horizons
On the flip side, GLP-1 drugs may enable more patients to qualify for bariatric surgery by helping them reach a safer BMI profile, according to Bernstein’s note on Friday.
Market Dynamics
Medical technology firms such as Stryker (NYSE: SYK) in the knee surgery market have indicated a “neutral to slightly positive” impact on procedure volumes as weight loss drugs assist patients in reaching a safer BMI level.
Conversely, the recent craze surrounding GLP-1 drugs can raise public awareness of obesity as a chronic disease and educate patients about the full range of treatment options, including surgery.
The Road Ahead
Ultimately, GLP-1s might actually act as a catalyst for the growth of bariatric surgery in the long run, Bernstein concluded.
More on Intuitive Surgical, J&J, etc.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
