reduction drug may tank junk meals shares – Bloomberg

33 reduction drug may tank junk meals shares – Bloomberg

The recognition of Ozempic is unhealthy information for McDonald’s, a British financial institution instructed buyers

British financial institution Barclays is urging buyers to brief shares in junk meals retailers like McDonald’s and Pepsi as a result of surging reputation of weight reduction medicine resembling Ozempic. Endorsed by celebrities, Ozempic has already made its producer essentially the most beneficial firm within the EU.

In a notice to buyers on Tuesday, Barclays strategist Jigar Patel warned that the share value of corporations resembling McDonald’s Corp., PepsiCo Inc., and Altria Group Inc, the final of which owns a number of cigarette manufacturers, could also be set to take a dive.

Prescribed drugs generally known as GLP-1 agonists could also be chargeable for this, Patel famous, in response to a report by Bloomberg. GLP-1 agonists are used within the remedy of diabetes and might support weight reduction by slowing digestion and boosting the physique’s consumption of its personal fats reserves.

Anecdotal proof additionally means that these medicine cut back cravings for addictive substances resembling alcohol and nicotine.

Danish drugmaker Novo Nordisk has been growing these medicine for greater than a decade, and markets them beneath the names Ozempic and Wegovy. Novo Nordisk’s share worth has greater than tripled since 2020, pushing the corporate’s market capitalization above Denmark’s total GDP and briefly dethroning French luxurious conglomerate LVMH because the EU’s most dear firm.

Tesla CEO Elon Musk credited Wegovy as making him really feel “match, ripped, and wholesome” final yr, whereas the drug has been endorsed by a number of Hollywood actors. 

“The impacts of GLP-1s probably introduce disruption into a variety of industries,” Patel wrote, with Bloomberg noting that an index of packaged meals firms on the S&P 500 has fallen 14% this yr, whilst all the S&P has risen by round 10%. 

Nevertheless, Patel suggested buyers that some corporations will profit from the burden loss craze, together with CVS Well being Corp., which owns the CVS pharmacy chain and Aetna medical health insurance firm.

Whereas robust gross sales and a rash of fine publicity has made Novo Nordisk extraordinarily rich, European regulators are at the moment probing Ozempic and Wegovy over experiences that they trigger suicidal ideas and self-harm amongst some customers. A weight reduction drug marketed by French pharma large Sanofi didn’t win approval within the US and was withdrawn from the European market in 2008 after triggering related signs in customers. 

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