Ozempic’s Market Edge Will Trouble Weight Loss Drug Competitors For Years To Come

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Without a doubt, it pays to be first.

Look no further than the booming market for weight loss drugs. While many biotech and pharmaceutical competitors have popped up hoping to profit, the public likely associates at least one of the following four brand names for GLP-1 drugs: Ozempic, Mounjaro, Wegovy or Zepbound (and in that order, according to Google Trends over the last 90 days).

Ozempic and Wegovy maker Novo Nordisk’s dominance in the weight loss space has given it a market cap larger than the entire GDP of its home country, Denmark, based on 2022 data. Eli Lilly’s Mounjaro and Zepbound have led the U.S. pharmaceutical company to an explosive profit boost, with some questioning whether it should swap with Tesla as a member of the “magnificent seven” leading U.S. stocks.

Being first to market, these companies have a critical edge: They’ve been able to cultivate loyalty among people who use the drugs and the doctors who prescribe them. Now, the businesses can focus on building “formidable competitive moats” by reinvesting earnings, while newer rivals are forced to expend significant capital in areas like marketing, manufacturing and sales, Third Bridge analyst Lee Brown told Forbes’ Robert Hart.

HSBC analyst Rajesh Kumar likened the GLP-1 market to a large pile of sugar that all the ants—pharma companies and biotechs—are trying to get a piece of. Even if Novo and Lilly build a metaphorical moat of water around the pile and seem secure in their positions, Kumar told Forbes “it would be absolutely ridiculous to imagine that there aren’t other companies who would want a share.” Dozens of drugs are in development from a range of companies vying for a cut and probing the moat’s depth and defenses. Maybe they’ll aim to minimize side effects, offer better results, or go for a possible game changer like an oral version of the drug—the four most popular brands are administered by injection.

But all that will take time, as drug discovery and development is a notoriously long process. Novo and Lilly are likely to have the market to themselves for years to come, and that market is estimated to be worth $100 billion by 2030. By then, perhaps Ozempic or one of the others might even enter that rarefied, ‘genericized’ space of brand recognition, the ‘Kleenex’ of weight loss drugs, if you will. Or it could just as easily go the way of Kodak, which went from dominant player in the photography industry (Who’s old enough to remember the “Kodak moment”?) to historical footnote.

BIG MOVES

In a leadership shakeup that many readers of this newsletter probably saw coming, Boeing announced its CEO Dave Calhoun will step down at the end of 2024, along with a few other key management departures. Boeing’s board is likely to look outside the company for their next CEO, longtime aerospace and defense consultant Loren Thompson told Forbes’ Jeremy Bogaisky. “This will be a tough job to fill.”

Calhoun himself was appointed CEO in 2020 to lead the manufacturer out of a confidence-shaking crisis over the quality of its airplanes following two crashes of its best-selling 737 Max narrowbody, but Boeing’s reputation has yet to recover from the early January incident in which a panel fell off an Alaska Airlines 737 Max after takeoff, and so another crisis-inspired leadership transition is in motion.

“The issues with Boeing’s Max program, which have been ongoing for more than five years, have created a trust gap eternity in an industry where the public’s lives are part of the equation,” Joel Richman, founder and partner at Escalate PR, told Forbes senior contributor Edward Segal via email. “The long rope Boeing has given its CEO (and itself) to rectify its issues while the door blowout and other recent quality control gremlins have plagued the builder has figuratively hung them.”

BRANDS + MESSAGING

Months of rampant speculation about Kate Middleton’s whereabouts and health condition were at least briefly silenced Friday when the Princess of Wales announced she was in early stages of chemotherapy treatment after a cancer diagnosis. It was the first major update provided on the princess’ health since Kensington Palace announced in January that she would undergo a surgery and be out of the public eye for months.

Cue the apology tour: Late night host Stephen Colbert had joked about Kate’s disappearance earlier this month, and even stoked rumors about Prince William having an affair, but admitted this week he does not want to “make light of somebody else’s tragedy” and hoped she’d make a quick recovery.

The hosts of The View also offered an apology to viewers on Monday, admitting they were “guilty of having gotten into the fun of ‘Where’s Kate?’” and stating they should have listened to Whoopi Goldberg, who had advised her co-hosts to give the royal family privacy. Actress Blake Lively also apologized for making jokes about Kate’s photoshop scandal.

ARTIFICIAL INTELLIGENCE

OpenAI’s new text-to-video tool Sora, powered by generative AI, isn’t available to the public yet, but the company did give early access to a select group of artists, designers and filmmakers a couple of months ago, and shared some of those results this week.

“As great as Sora is at generating things that appear real, what excites us is its ability to make things that are totally surreal,” Toronto-based multimedia production company Shy Kids said in a statement accompanying Air Head, a short film it made with Sora. The word surreal aptly describes the video, which stars a guy with a yellow balloon for a noggin.

As Forbes contributor Leslie Katz writes, generative AI is bringing out a range of passionate reactions from creators—from enthusiasm about the tools’ creative potential to concern that artists’ work will be stolen to train AI datasets, or that algorithms will steal creatives’ jobs altogether—the perennial AI conundrum.

FACTS + COMMENTS

Legislation that would potentially ban TikTok sailed through the U.S. House of Representatives but still awaits its fate in the Senate. While plenty of young people have voiced criticism of the geopolitical power play, a ban would gut small businesses, too.

5 million: Number of businesses with a TikTok account, according to the platform

$14.7 billion: Small business revenue from TikTok last year, which led to an extra 224,000 U.S. jobs, according to an Oxford Business study

29%: For this portion of content creators making more than $10,000 a year, but less than $200,000, TikTok is their primary source of income

STRATEGIES + ADVICE

There are few athletes on the planet as marketable as baseball’s Shohei Ohtani, but his image has taken a hit thanks to a recent scandal involving his former interpreter. Here’s a look at how other star players were able to rehab their image, including Tiger Woods and the late Kobe Bryant.

Former RNC chair Ronna McDaniel might have hoped to rehab her image via her new gig as an NBC News contributor, but the network is backtracking on the hire after internal backlash and on-air criticism. This rundown covers the key events that led to NBC’s quick reversal.

QUIZ

In the battle for online shoppers in the U.S., it’s long been a fight between Amazon and everyone else. But according to the Wall Street Journal, the retail giant has actually seen its number of daily active users drop since the launch of which competitor?

A. Walmart+

B. Temu

C. AliExpress

D. Shopify

See if you got the answer right here.