“As such,the uptake of GLP-1 RA has the potential to reduce the number of patients with OSA,impacting growth for ResMed,” said Macquarie,which downgraded its growth estimates for ResMed on this basis.
So did UBS analysts led by Laura Sutcliffe.
“The GLP-1/weight loss thesis has now become firmly rooted in the ResMed story,” she said.
“Our analysis of existing data for GLP-1s concludes that there is a good chance that newer GLP-1s will be able to offer enough weight loss that some patients will be able to stop using CPAP[breathing assistance] machines. In time,we think 14 per cent of ResMed’s volume could be lost.”
ResMed tried to placate the market last month with a presentation at a US healthcare conference.
“When you look at our patient population,you’ll see a significant factor of obesity,but it’s not a single all-linear relationship between obesity and sleep apnoea,” said ResMed’s chief operating officer,Rob Douglas.
Healthcare hasn’t been the only sector to experience Ozempic-fuelled turbulence.
Alcohol and snack-related stocks have dropped on US markets over the past couple of months as analysts try to work out the impact of the drugs on demand for processed food,given their role in reducing the appetite of users.
Shares in Kellanova,the company that makes snacks such as Pringles,hit year-lows in the US this month. The group’s chief executive,Steve Cahillane,said the company was watching the popularity of Ozempic. “We’re by no means complacent,” he told Bloomberg.
Closer to home,ASX-listed pizza maker Domino’s says it’s also watching the rise of appetite-suppressing drugs,and says it will “adjust our products and services accordingly” if needed. But chief executive Don Meij is upbeat about the enduring appeal of his company’s products.
“From what we have observed,consumers may be eating less but they still want to enjoy a treat throughout the week. Not only is Domino’s the ultimate treat,but pizza is also the meal of choice for many group gatherings and celebrations,and we don’t see that changing anytime soon,” he said.
And while Ozempic has captured the imagination of sharemarket analysts in recent months,there are several unknowns about the future of these types of products,particularly in the Australian context.
It’s not yet known how many consumers will choose or be able to afford to buy this group of drugs for the long term,or whether the use will be enough to change trends in sectors such as food production. Manufacturer Novo Nordisk told Australia’s Therapeutic Goods Administration (TGA) last month that supply of the drug would be limited for 2023 and into 2024.
Shares in Novo Nordisk are up by 51 per cent year-to-date,while Eli Lilly,which makes a similar product called Mounjaro,are up 66.4 per cent.
Portfolio manager at Platinum Asset Management’s International Health Sciences Fund,Dr Bianca Ogden,urges caution around the flurry of enthusiasm about these products,and the companies behind them.
“I think you always have to keep a level head – these hypes can go for a while,but they can quickly move on to the next thing,” she said.
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