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.