Miracle Drugs, Messy Markets: Why GLP‑1 Boom Hasn’t Paid Off for Investors

The story of GLP‑1 weight‑loss drugs is one of the great medical and commercial breakthroughs of the last decade: demand is running hot, sales are soaring, and usage is reaching sheer ubiquity in the U.S.

So why do Novo Nordisk, Eli Lilly, and Hims & Hers — companies at the heart of the boom — all have slumping stock prices?

The Paradox of Plenty

According to a recent RAND survey, nearly 12% of all Americans have tried GLP‑1 medications for weight loss. Quarterly sales of the four biggest GLP-1 brands have now topped $15 billion for the first time ever, shattering records.

And yet — investors in the drugmakers and distributors are nursing losses. Over the past six months: Eli Lilly (LLY) is down 18%, Novo Nordisk (NVO) has slid 34%, Hims & Hers (HIMS) has tumbled 35%.

That disconnect explains why ETFs that bundle health care and pharma exposure are showing the same drag. For example: OZEM ETF (a thematic vehicle focused on companies tied to weight loss and GLP‑1 adoption) has faced volatile flows despite headline-making demand. PPH ETF (VanEck Pharmaceutical ETF), heavy with pharma names like Lilly and Novo, illustrates the broader sector lag even amid historic revenue numbers.

Wall Street Wants “What’s Next”

The problem isn’t the past quarter’s results — it’s visibility into the next.

Analysts argue investors are skeptical on three fronts:

Durability of Growth – Are these staggering adoption rates sustainable, or is the U.S. market nearing saturation?

Profitability Pressure – Telehealth companies selling compounded versions undercut pricing. Regulators could tighten rules, squeezing margins.

Pipeline Uncertainty – Both Lilly and Novo are working on pill-based versions. Lilly’s latest trial disappointed investors with weaker-than-hoped weight-loss outcomes — muting excitement despite blockbuster earnings.

The Takeaway for Investors

While GLP‑1 drugs have transformed medicine and redefined weight‑loss culture in America, owning the stocks is not the same as believing in the science. For stock pickers: Returns hinge not just on sales, but on execution of the pipeline, pricing power, and competitive moat. For ETF investors (OZEM, PPH): Exposure offers beta to the GLP‑1 story, but with volatility and disappointment baked in. For the sector as a whole: GLP‑1s may be the “miracle drugs” of this era — but miracle stocks, they are not.

Bottom line: Sales are stunning, but markets price the future, not the past. Unless drug makers prove the next generation of products can replicate the success of today’s injectables, GLP‑1s may remain a better health story than an investment story.

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