Analysis: Healthcare companies counter investor worries over Wegovy effect

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Healthcare companies who profit from treating obese and overweight patients are trying to convince investors that powerful new weight-loss drugs won't shrink their businesses.

The global market for obesity drugs could reach as much as $100 billion within a decade due to the effectiveness of Novo Nordisk's

"The market is in a shoot-first, ask-questions-later mood when it comes to weight-loss drugs," said Nicholas Anderson, manager of the Thornburg International Growth Fund, which holds shares of Novo Nordisk. "What's less clear on the losers side is who will actually be affected and how long will it take to show up in numbers.

"We expect it will take at least a decade to reach peak penetration of these products in the indicated population," Kenneth Stein, Boston Scientific's global chief medical officer, told investors on Thursday, adding that only a minority of obese American patients will use the drugs.

The weight-loss drugs' cost and uncertainty about whether their use will improve the long-term health of patients and reduce healthcare spending will limit near-term expansion of insurance coverage, said Ann Hynes, a healthcare services analyst at Mizuho Securities.

 

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