Potential Transformation of GLP-1 Drugs in 2025

Investing.com — The landscape of GLP-1 drugs, recognized for their efficacy in weight loss and diabetes management, is poised for a potential transformation in 2025, according to analysts at Barclays (LON:BARC).

These drugs, such as Novo Nordisk’s Ozempic and Wegovy, are gaining prominence not only for their therapeutic benefits but also for their broader implications across various industries, including healthcare and consumer goods.

Barclays notes that while the current penetration of GLP-1 drugs in the U.S. remains low, multiple catalysts could dramatically reshape this narrative. The demand for these medications is outpacing supply, but significant innovations and production developments are on the horizon.

A crucial factor is the anticipated launch of a next-generation obesity drug, CagriSema, by Novo Nordisk (NYSE:NVO). This drug, a combination of semaglutide and cagrilintide, aims for an ambitious weight loss target of 25% body weight—improving on the 15-20% weight loss typical of existing GLP-1 drugs. Barclays estimates CagriSema’s potential peak sales could reach $49 billion by 2038, significantly surpassing projections for current GLP-1 drugs like Wegovy.

Supply challenges have been persistent in the GLP-1 market. Barclays highlights recent developments, including Novo Nordisk’s acquisition of three manufacturing facilities via the Catalent (NYSE:CTLT) deal, which could enhance production capacity starting in 2026 and alleviate supply shortages.

On the regulatory front, uncertainties persist. The political environment in the U.S., notably under a potential Trump administration, could pose challenges like drug price reforms or restrictions on GLP-1 usage. Although immediate regulatory changes seem unlikely, these possibilities create an overhang on the market.

Barclays emphasizes the extensive impact of GLP-1 drugs across sectors. In consumer goods, companies are adapting their portfolios to align with evolving consumer behaviors shaped by GLP-1 usage. For example, Nestlé has launched a GLP-1 Nutrition Support Platform with products designed for individuals on these medications. Similarly, Danone (EPA:DANO) is well-positioned with its focus on gut health and protein-rich offerings, aligning with GLP-1 users' dietary priorities.

Retailers, such as Walmart (NYSE:WMT), are also experiencing shifts, noting significant contributions to sales from GLP-1 drug transactions, while packaged food companies are adapting their strategies to meet rising demand for portion-controlled and high-protein options.

The restaurant industry has a more nuanced situation. Quick-service restaurants may feel less direct impact due to a lower-income consumer base, less likely to adopt GLP-1 medications. In contrast, casual dining could be more vulnerable due to its higher-income customers who may prioritize health-conscious dining influenced by these drugs.

Barclays projects that broader adoption of GLP-1 drugs could stem not only from weight-loss benefits but also from emerging data on their effectiveness in treating other conditions, including Alzheimer’s and cardiovascular issues. Trials like Novo Nordisk’s EVOKE, expected to release results in late 2025, could greatly expand the therapeutic scope of these medications.

However, the success of GLP-1 drugs in transforming industries will depend on overcoming challenges related to affordability, accessibility, and public perception. As production enhances and competition intensifies within this drug category, prices may stabilize, providing opportunities for wider adoption.