Top 7 Biotech Stock Winners As Weight Loss Drug Battle Escalates: Goldman Sachs Names Best Picks
Portfolio Pulse from Piero Cingari
Goldman Sachs highlights a significant opportunity in the biotech sector for outsourcing the production of obesity therapeutics, projecting the global obesity market to reach $100 billion by 2030, potentially expanding up to $400 billion. Novo Nordisk and Eli Lilly, current leaders in the market, are expected to outsource 50% of their production to meet demand, creating a $5 billion opportunity for outsourced providers. Seven biotech stocks, including Avantor, Thermo Fisher, Waters Corp., Agilent Technologies, Danaher, Wuxi AppTec, and Asymchem Laboratories, are identified as beneficiaries of this trend.
March 13, 2024 | 4:35 pm
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POSITIVE IMPACT
Agilent Technologies is expected to benefit similarly to Waters Corp. from the growing demand for HPLC technology in the production of obesity drugs.
As obesity drug production increases, the demand for HPLC technology grows, positioning Agilent Technologies for potential growth.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 70
POSITIVE IMPACT
Avantor is well-positioned to benefit from the increased demand for oral tablet APIs, with a significant portion of GLP-1 drugs expected to be orally administered by 2030.
Goldman Sachs' projection of 45% of GLP-1 drugs being orally administered by 2030 places Avantor in a favorable position to benefit from this trend.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Danaher is noted to benefit across the entire production chain for biologically produced GLP-1 drugs, indicating a strong market position.
Danaher's involvement in the full production chain for GLP-1 drugs, from cell lines to culture media, places it in a strong position to capitalize on market growth.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
Eli Lilly's strategy to outsource production for obesity drugs, including its high-potential tirzepatide, positions it for significant market growth.
Eli Lilly's focus on outsourcing to meet the demand for its obesity treatments, especially with tirzepatide's potential, underscores its growth trajectory.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Novo Nordisk is expected to increasingly outsource production of obesity treatments, contributing to a potential market expansion.
As a current market leader, Novo Nordisk's move to outsource production to meet demand highlights its strategic positioning and potential for growth.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Thermo Fisher's involvement in fill and finish services for Novo Nordisk and its CDMO business growth prospects align with the increasing production demands.
Thermo Fisher's existing relationship with Novo Nordisk and its capabilities in CDMO services position it to capitalize on the growing production needs.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Waters Corp. stands to gain from the increased need for HPLC instruments and columns as obesity drug production scales up.
The scaling up of obesity drug production necessitates more advanced HPLC technology, benefiting Waters Corp. as a provider of such instruments.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 70
POSITIVE IMPACT
Wuxi AppTec, as a key CDMO for 11 GLP-1 drugs, is strongly positioned in the market, indicating potential for significant growth.
Wuxi AppTec's involvement in both clinical and commercial-stage projects for GLP-1 drugs underscores its significant role and potential for growth in the market.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80