Sam Dickie: Fisher Funds expert on the impact of weight-loss drugs on the economy

Ozempic, Wegovy and Mounjaro are among the weight-loss drugs that more people are taking - but questions have been raised about their economic impacts.

These drugs will also have an impact on other sectors, including healthcare and food, and research is still ongoing. 

Fisher Funds expert Sam Dickie explained further.

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Episode Transcript

Speaker 1 (00:00):
Heather Duper cla.

Speaker 2 (00:01):
Now.

Speaker 3 (00:02):
A couple of years ago, Sam Dicky and I talked
about these new weight loss drugs that were supposedly going
to change everything. You know, we're talking about OZMPIC, WO
GOV and so on. We've never seen a drug class
of the size before. And Sam from Fisher Funds is
back with us again on this subject.

Speaker 1 (00:14):
Hey Sam, hey here that how's it going? Yeah, very well,
thank you. How are these drugs doing now?

Speaker 2 (00:20):
Yeah? Bigger than even the bulls thoughts. So around one
in eight American adults is now on these drugs. And
if you look at it in terms of market capitalization
or valuation of the key companies, at the time Eli
Lilly we talked about was worth about five hundred billion
dollars and that felt pretty big. Today Eli Lilly has
just become the first pharmaceutical company in history worth are

(00:42):
trillion dollars and the kicker is seems to be working.
So US obesity has fallen from a peak of forty
percent to seven percent in two years, and that's the
first reversal and obesity since nineteen eighty.

Speaker 1 (00:54):
Wow, that's extraordinary. Are people sticking with the drugs once
they're on them?

Speaker 2 (00:59):
I think that is the the killer story that no
one's really talking about. So in the trials where everything's
paid for and the patient's handheld adherence or taking the
drugs regularly, was over eighty percent, But in the real
world two thirds stop within the first year and only
one in twelve are still on the drugs three years later,
and that seems to be because they're expensive. Side effects

(01:20):
are still pretty tough, and around a quarter of the
weight loss is actually muscle, not flat fat. So remember
we talked about lean and frail, and the sting in
the tail is when people stop, the weight comes back on.
Two thirds of it returns within one and a half years.
So this looks like lesser one off cure and more
of our sort of lifetime prescription if you're able to
if you want to get the best out of it.

Speaker 1 (01:40):
So where is the showing up in the real economy then.

Speaker 2 (01:44):
Yeah, really everywhere. So you know, we know these drugs
silence the food noise that constant pull to snack, so
in healthcare, and this is a bit counterintuitive. At the time,
you and I talked about a risk to demand for
sleep at near device devices, for example, or a risk
to the demand for gluecose monitors. Now what's actually happened

(02:07):
is they've actually been more of a demand driver because
these funnel more patients to these companies, not fewer. And
even orthopedic surgery looks like a bit of a winner.
So if you have a BMI over thirty five, it
rules out thirty percent of joint replacement candidates. But as
you bring that BMI down, you see more orthopedic surgery.
On the consumer side, US households on these drugs been

(02:30):
eight percent less on fast food and sixty six percent
less on soda and alcohol, so it's definitely having an
impact there. And this is quite an interesting one. I thought.
One of a broker estimates the average US passenger has
lost ten pounds, sorry, not two pounds, ten pounds, saving
the four biggest US air lines about six hundred million
dollars a year in fuel.

Speaker 1 (02:50):
That's nutty, isn't it. Where it's showing up, it's just
absolutely crazy.

Speaker 2 (02:53):
Right.

Speaker 1 (02:54):
What does this mean then for investors?

Speaker 2 (02:56):
I just think I think it means that it has
been than the bulls think. But it doesn't always mean
everyone wins. So the two original players we talked about,
Novo Nordisk and Eli Lilly. They have dramatically diverged, so
Lily's drug delivers twenty percent weight loss versus fourteen percent
for Novo Nordisk, and Lily's now got sixty percent of

(03:17):
the US market and has outperformed Novo Nordisk by three
hundred percent. The bottom line though, is it is one
of the biggest consumer disruptions of our generation, so we
need to keep a close eye on it as it progresses.

Speaker 1 (03:30):
Interesting, Sam, thank you very much, appreciate it. Sam Dickey
Official funds.

Speaker 3 (03:33):
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