Benzinga - by Piero Cingari, Benzinga Staff Writer.
Roundhill Investments launched a new exchange-traded fund (ETF) Tuesday.
What Happened: The Roundhill GLP-1 & Weight Loss ETF (NASDAQ:OZEM) marks a significant milestone as the world's first GLP-1 ETF.
Roundhill asserts that weight loss drugs, particularly GLP-1 agonists, are among the most revolutionary advancements in the global pharmaceuticals industry.
Notably, OZEM is the only ETF providing dedicated exposure to transformative weight loss stocks such as Eli Lilly & Co. (NYSE:LLY), the producer of Zepbound, and Novo Nordisk A/S (NYSE:NVO), the maker of Ozempic.
“These new treatments work incredibly well,” Roundhill CEO Dave Mazza told Benzinga.
Citing Goldman Sachs research, Mazza believes the market for weight loss drugs could expand more than 16 times its current size from its current $6 billion and reach $100 billion by 2030.
Mazza compared the market dominance of Novo Nordisk and Eli Lilly in the weight loss drug sector to Nvidia Corp.‘s (NASDAQ:NVDA) position in generative AI.
Over 40% of the OZEM portfolio is invested in these two weight-loss drug leaders.
“Those two names are in a league of their own as they have drugs currently in market. While we believe there's plenty of upside left in these names, there's more opportunities out there including companies that are in development with other drugs,” Mazza said.
For instance, Amgen Inc‘s (NASDAQ:AMGN) drug shows better results than bariatric surgery in just four weeks, and Viking Therapeutics Inc. (NASDAQ:VKTX) is developing an oral tablet.
Chart: 5-Year LLY, NVO Stock Performance
Why It Matters: The statistics paint a compelling picture. Since 1975, global obesity rates have nearly tripled, with projections indicating that over half the population will be affected by 2030.
For the first time, revolutionary drugs promise significant weight loss — 15% or more over short periods — compared to the modest 1% to 5% typically achieved through diet and exercise. Despite the growing demand, only a few companies produce these weight loss drugs, and existing ETFs lack the precision to provide focused exposure.
Priced at 0.59%, OZEM is actively managed by the team behind the Roundhill Generative AI & Technology ETF (NYSE:CHAT), which has seen a 38% growth over the last year.
‘Investors Can't Just Buy A Basket Of Big Pharma Names And Call It A Day’ Mazza emphasized, “To gain exposure to these game-changing companies, investors can't just buy a basket of big pharma names or a broad-based biotech ETF and call it a day. They need specific and precise exposure that the OZEM ETF uniquely offers.”
Regarding Hims & Hers Health Inc. (NYSE:HIMS) recent announcement of offering generic versions of a weight loss drug, Mazza noted the dynamism and early stages of the weight loss drug market.
“We believe it's positive that HIMS is seeking to offer these drugs considering the supply challenges of the existing drugs. However, we don't expect this to have a material impact on the industry as we're forecasting prices to decline as the industry matures and more drugs come to market,” he said.
Now Read: Here’s How Much You Would Have Made Owning Novo Nordisk Stock In The Last 10 Years
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