A leading exchange-traded fund provider is betting on the long-term popularity of weight-loss drugs GLP-1.
Roundhill Investments’ GLP-1 and Weight Loss ETF (OZEM), which began trading last week, are the top pair Eli Lilly And Novo Nordisk with players developing new treatments for weight loss and diabetes. CEO Dave Mazza said his firm is benefiting from the industry’s explosive growth potential.
“The ability to actively manage the companies that actually bring drugs to market and then go down the chain and identify the ones that are at certain stages is powerful,” Mazza said on CNBC’s “ETF Edge” last Monday.
Eli Lilly and Novo Nordisk each have roughly 20% stakes in the ETF as of Friday, according to Roundhill’s website. The next largest positions are Zealand Pharma, Amgen And Chugai Pharmaceuticaleach of which weighs less than 5%.
As of Friday’s market close, Eli Lilly shares were up 90% and Novo Nordisk shares were up 68%. Mazza dismissed concerns that investors have missed out on a rally, noting that the weight-loss drug industry is still in its “early days.”
“There’s a lot of room for growth in the market with other companies coming in, whether it’s more powerful drugs or things that don’t really need to be injected.”
He also believes GLP-1 drugmakers are following a similar trajectory to artificial intelligence stocks.
“It’s a bit like thinking about Nvidia with AI. They just have an advantage,” Mazza said.[Eli Lilly and Novo Nordisk] focused on diabetes and weight loss drugs a few years ago and were able to enter the market and achieve amazing results.”
After launching last Tuesday, shares of Roundhill’s GLP-1 & Weight Loss ETF ended the week down almost 2%.