Home Business The disruptive power of weight-loss drugs is felt beyond the pharmaceutical industry

The disruptive power of weight-loss drugs is felt beyond the pharmaceutical industry

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The disruptive power of weight-loss drugs is felt beyond the pharmaceutical industry

As they do every summer, publicly traded companies released their second-quarter results as Americans stripped bare on the beach. But this year the time was right. In several earnings calls in August, the CEOs assured investors that the Ozempic revolution had not left them in the dust and that they could somehow share in the roaring success of new diabetes and weight-loss drugs.

“It puts us in a good position to be a solution for those on medication,” said Dan R. Chard, chief executive of Medifast, which makes diet products like protein shakes and bars, adding: “They’re looking for help.” He told analysts this even as he explained that next-generation drugs had helped topple profits, down 34.7 percent on-year.

“We will continue to look at this,” Michael Johnson, chief executive of nutritional supplement maker Herbalife, told investors. “And when we see an opportunity to take advantage of it, we will.”

In theory, that opportunity (both to profit and to lose fortunes) could be enormous not only for the companies behind these drugs but also for some in entirely different industries.

Known as GLP-1 drugs, the drugs are already making big profits. Novo Nordisk makes both Ozempic, which has been approved only for type 2 diabetes, and its close relative Wegovy, which has been approved for weight loss. They mimic a glucagon-like peptide that regulates appetite in the brain, making people feel full for hours. Together, they helped Novo’s profits soar 32 percent in the first half of this year, and Novo’s market value is now greater than that of the entire Danish economy. Eli Lilly’s sales rose 28 percent in the second quarter, thanks to another diabetes drug, Mounjaro, which the Food and Drug Administration may approve for weight loss this year.

And the full potential is not even clear yet. The market for weight-loss drugs is huge: There are approximately 750 million obese people worldwide, including about 42 percent of adults in the United States, where obesity-related diseases generate billions of dollars. in health care costs each year. But Novo says the GLP-1 drugs could eventually have other uses, such as helping prevent cardiovascular disease among obese adults. There are indications that they could treat addiction and even Alzheimer’s as well.

“The market potential is very, very significant,” Novo’s chief financial officer, Karsten Knudsen, told me when I visited the company in June. “We’re operating in kind of unusual territory.”

Diet companies are preparing for disruption. For decades, weight loss companies have relied on brand-name packaged meals and lifestyle programs. Some, like WeightWatchers and Noom, have rushed to sell GLP-1 drugs themselves, while others still hope their products can survive the Ozempic era. Jenny Craig closed her weight loss centers in May after 40 years. And Simply Good Foods, which distributes Atkins diet products such as frozen meals and cookies, will market Atkins as “a perfect adjunct for people who are thinking about using the drugs,” the company’s chief executive told analysts in June at the time. , Joe Scalzo.

The ripple effects are widening. Retailers like Walmart, Kroger and Rite Aid say GLP-1 prescriptions are drawing more people into stores, where they make other purchases. Walmart CEO Doug McMillon told analysts in August that his executives “expect grocery, health and wellness, primarily due to the popularity of some GLP-1 drugs, to grow as a percentage of the total.” .

Medtronic chief executive Geoff Martha said the company had seen a “modest” drop in bariatric surgery, presumably as people turned to weight-loss drugs. And some analysts believe the drugs could alter the American diet.

“If you eat fast food every day, you’ll probably still eat fast food every day,” James van Geelen of Citrinas Capital Management said on Bloomberg’s “Odd Lots” podcast. “You’ll just eat a lot less.”

Still, there is room for other approaches to combat obesity. “These drugs are game changers, but with an asterisk,” said David Ludwig, an obesity specialist and professor of pediatrics at Harvard Medical School. (Medications come with a long list of side effects.) “Even if you can reduce the weight of the entire population with medication, that will not eliminate the risks of a bad diet.”

Full of cash, Novo agrees. “We need to look at what’s next,” his executive vice president of business strategy, Camilla Sylvest, told me. In June, the company opened an obesity prevention unit near Copenhagen to investigate how to stop the disease before people need to take weight-loss drugs. -Vivienne Walt

The US job market is starting to look like it used to. Employers added 187,000 jobs in August, the Labor Department reported Friday, with unemployment rising to 3.8 percent as the economy continued to lose momentum built up after the pandemic shutdowns.

Commerce Secretary Gina Raimondo visits China. He had the difficult task of promoting trade between the two superpowers while at the same time holding firm to limits on the export of technology imposed in the name of American national security. The two countries agreed to create new dialogues, including a working group for trade issues.

The White House names the first drugs included in the Medicare price negotiations. The long-awaited list of 10 drugs will be subject to a landmark new program aimed at reducing Medicare costs. Drugmakers have rejected the plan, including in court, and Republicans have criticized the initiative as government overreach.

UBS reports a quarterly profit of $29 billion, with an asterisk. The huge gain – the biggest in banking history – stems from the bank’s acquisition of rival Credit Suisse this spring for around $3.2 billion, a steep discount that is skewing UBS’s results. But it belies the challenges facing UBS as it tries to complete the biggest bank acquisition since the 2008 financial crisis.

When Emily Weiss stepped down last year as CEO of Glossier, the skincare and beauty brand she founded in 2014, some called it the end of the “girlboss.” That archetype (of media-savvy female founders with millennial-focused startups) had been fueled by “#Girlboss,” the 2014 memoir of Nasty Girl founder Sophia Amoruso.

Glossier, with its direct-to-consumer model and voice website, changed the way women shop for makeup, ultimately surpassing a billion-dollar valuation. But the brand stumbled while struggling to break into brick-and-mortar retail; faced criticism from retail employees who alleged a racist and toxic work environment; and she shelved projects like a makeup line that veered away from her dewy, barely-there look.

DealBook spoke with Marisa Meltzer, author of the upcoming book “Glossy: Ambition, Beauty, and the Inside Story of Emily Weiss’s Glossier,” about the lessons we could take from Weiss and the #Girlboss movement.

This interview has been edited and condensed for clarity.

Can you contextualize the #Girlboss movement?

It was quite offensive and tiny. No one except Sophia called herself a boss. But it was also something that benefited them because it aroused interest. For them, it was a way to get the press talking about their businesses, something that wasn’t the typical things founders and CEOs sometimes had to do, like fashion spread.

At that time there was a great debate about whether the press would have covered the scandals of companies such as outdoor voices, man repellent and Brighter different if they had men in command. What do you think?

I think there was a little bloodlust. These women had been propped up in a way that was a bit annoying; I’m sure they found it annoying too.

Some of those companies had real problems, like being sued for firing pregnant employees. And other companies, like Glossier, were accused of having a workplace, largely for their retail employees, that was less than ideal. That is different from criminal behavior.

The reality is that these companies were not the same. The women in command were not all the same. And they weren’t making the same mistakes. And they didn’t have the same level of success either.

What about Glossier now?

Glossier seems to have taken the time since Emily quit to reevaluate. They decided too late to go into retail. They launched at Sephora last February. The most important task they are trying to accomplish is to get the company in a better position for an exit.

Who could buy them?

A company like Estée Lauder, which owns many boutique brands, would make sense. There’s also Kering, the fashion house that owns Gucci, which has been making some visible moves to further enter the beauty market.


In 2019, while facing criminal charges for financial improprieties, former Nissan executive Carlos Ghosn skipped bail and fled Japan in an elaborate plot involving a private jet and a trunk with punched breathing holes. At the time, DealBook called it “a movie-level caper,” and two projects, one from the BBC and one from Netflix, rushed to portray it on video. But neither did quite as well as a four-part Apple TV+ documentary series that premiered last week.

“Wanted: The Curious Case of Carlos Ghosn” is a production of The Wall Street Journal and is based on a book by two of its reporters. Featuring Ghosn, it tells the thriller-like drama of one of the most memorable business stories of this decade while exploring its nuances.

“The series explicitly raises the question about Carlos Ghosn: victim or villain?” Writes Adrian Horton of The Guardian. “With blurred lines, overlapping narratives, and complicated document trails, there’s no simple answer.”

Thank you for reading! See you on Tuesday.

We would like to receive your comments. Email your ideas and suggestions to dealbook@nytimes.com.

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