'Beyond our expectations': How to invest in obesity drugs like Ozempic with ASX ETFs

This could be your way to invest in obesity drugs.

medical asx share price represented by doctor giving thumbs up

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ResMed Inc (ASX: RMD) share price has come under significant pressure in recent months due to the emergence of obesity drugs.

With analysts forecasting huge growth in demand for drugs like Ozempic over the next decade, there are concerns that ResMed could lose some of its sleep apnoea customer base. That's because research shows that 70% of obstructive sleep apnoea (OSA) patients are obese.

The good news is that most analysts believe this is an overreaction and that there's still a huge market for ResMed to grow into outside any Ozempic impacts.

But what about Ozempic and other obesity drugs? Should we be investing in them as well?

The team at Morgan Stanley believes it could be a good idea based on its expectations for explosive growth through to 2030.

Morgan Stanley's European Biopharmaceuticals analyst, Mark Purcell, commented:

Social media activity documenting transformative weight loss, together with the establishment of affordable insurance coverage more quickly than anticipated, has helped drive demand for obesity medicines beyond our expectations. While supply constraints have capped sales growth in the near term, the global obesity market could go from a $2.4 billion category in 2022 to reach $77 billion in 2030, up from our previous estimate for a $54 billion.

ASX ETFs to the rescue

The simplest way to invest in Ozempic and other obesity drugs is to go directly to the source.

In the case of Ozempic, this would mean investing in Danish pharmaceutical giant Novo Nordisk (NYSE: NVO), which is listed on Wall Street.

As for Mounjaro, a diabetes treatment being repurposed as an obesity drug, it is owned by US pharmaceutical behemoth Eli Lilly And Co (NYSE: LLY).

However, if you're not keen on going down this route, then you could look at ASX ETFs.

The VanEck Global Healthcare Leaders ETF (ASX: HLTH) gives investors access to 50 of the largest international companies from the global healthcare sector. Its holdings include both Eli Lilly & Co and Novo Nordisk.

Alternatively, the BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG) could be another way to do it. It is invested in a touch under 70 global healthcare shares, with Eli Lilly & Co and Novo Nordisk making up a total weighting of 12.9% of the portfolio.

Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Novo Nordisk. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

ETF on different coloured wooden blocks.
ETFs

Top 10 most traded ASX ETFs in June

The most traded ASX ETF was the ever-popular Vanguard Australian Shares Index ETF.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
ETFs

Own the Vanguard Australian Shares Index ETF (VAS)? Here's how much you'll get paid today

Today's VAS paycheque might disappoint some investors.

Read more »

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

Why I'd still call the FANG+ ETF a buy

The US tech giants have been great performers.

Read more »

The letters ETF with a man pointing at it.
ETFs

Buy and hold these ASX ETFs until 2030

Looking for long term options? Check out these picks.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
ETFs

Should Aussies choose Vanguard Australian Shares Index ETF (VAS) or a term deposit for passive income?

Both investment options come with positives and negatives.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
ETFs

Where to invest $5,000 into ASX ETFs in July

Could these funds be a good place to invest your money?

Read more »

A woman sits at her desk thinking. She is surrounded by projections of world maps on various screens with data appearing below them.
ETFs

These top ASX global shares ETFs delivered stunning returns of 50% to 70% last year

We reveal the 6 best-performing ASX ETFs providing Aussie investors with international market exposure.

Read more »

Five people are leaping in the shallows of the beach water as sunset shines gold on them.
ETFs

Which Australian shares ASX ETFs have dished out the best returns over 3 years?

We reveal the top 5 performers over the past three financial years.

Read more »