With global obesity numbers bursting at the seams, some of the smartest biotech stocks to buy are those with weight loss drugs.
Just look at Eli Lilly (NYSE:LLY).
The company is seeing so much demand it’s spending $5.3 billion to make even more Mounjaro and Zepbound. According to The Wall Street Journal, Zepbound alone is generating more than 74,800 prescriptions every week in the U.S. No wonder shares of LLY exploded from a January low of about $580 to $901.26.
Helping, demand could rocket even higher with millions of people in need of help.
According to the World Health Organization, obesity has more than doubled since 1990. Global adult obesity has more than doubled since 1990, and adolescent obesity has quadrupled. Over 390 million children and adolescents aged five to 19 years were overweight in 2022, including 160 million who were living with obesity.
In short, with millions of people in need of help, obesity drug treatment demand should rocket. And it’s why some of the smartest biotech stocks to buy are those with weight loss drugs.
Viking Therapeutics (VKTX)
About a year ago, I first mentioned Viking Therapeutics (NASDAQ:VKTX) as it traded at $22 a share. After watching it rally to nearly $100, it pulled back to $48, where it’s again a buying opportunity.
For one, the company reported that the injectable form of its treatment helped patients lose up to 13.1% of their weight after 13 weeks in Phase 2 trials. Then, the company said the tablet form of its treatment led to a weight loss of about 3.3% after 28 days in Phase 1 trials.
Two, thanks to Viking’s success in obesity drug trials, analysts at BTIG just reiterated a buy rating with a price target of $125 a share.
Three, as pointed out by Motley Fool contributor George Budwell, Viking’s treatment has been “pegged as a potential $21 billion a year therapy by some analysts – that is, if it can gain timely approvals in both the U.S. and the European Union.”
Altimmune (ALT)
Citing data from its MOMENTUM trial, Altimmune’s (NASDAQ:ALT) pemvidutide treatment led to weight loss while preserving lean mass, as noted by Seeking Alpha.
Phase 2 results showed that patients lost an average of 15.6% of their body weight at 48 weeks at the highest dose. The study also found that the treatment led to better lean mass preservation as compared to other similar weight loss treatments.
“Preservation of lean mass, which is primarily muscle tissue, is believed to be important in maintaining healthy weight loss and physical function,” CEO Vipin Garg said in a news release. “We believe that the level of muscle preservation observed in the Phase 2 trial further adds to the differentiation of pemvidutide in the treatment of obesity.”
In fact, as I’ve noted before, the company believes the preservation of lean mass with weight loss is critical. In fact, severe medical outcomes, such as musculoskeletal issues and bone fractures, can occur if a person loses too much lean mass during weight loss.
Structure Therapeutics (GPCR)
Another one of the top biotech stocks to buy is Structure Therapeutics (NASDAQ:GPCR), a clinical-stage global biopharmaceutical company developing novel oral small molecule therapeutics for metabolic and cardiopulmonary diseases, including obesity.
Just recently, the company said its Phase 2a obesity study, GSBR-1290 demonstrated a clinically meaningful and statistically placebo-adjusted average decrease in weight of 6.2% at 12 weeks, as noted by SeekingAlpha.
Moving forward, its GSBR-1290 Phase 2b obesity study is expected to begin by the fourth quarter. Helping, JPMorgan says GPCR is an overlooked weight loss play.
“We think the opportunity for oral GLP-1s is underappreciated and think this market could generate $30bn in sales by 2035,” added the firm, as quoted by CNBC.
“GPCRs lead asset, 1290, is a pure-play option for this opportunity, and even a small share would support substantial upside to the stock. We think that 1290/Structure could be an attractive partnership opportunity for larger biopharma companies looking to participate in the Type 2 diabetes/obesity market.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
