Roundhill Investments’ recent launch of the GLP-1 & Weight Loss ETF (OZEM) signifies a strong belief in the long-term popularity of GLP-1 weight loss drugs. The ETF includes industry leaders such as Eli Lilly and Novo Nordisk, alongside other players who are developing new treatments for weight loss and diabetes. The CEO of Roundhill Investments, Dave Mazza, expressed confidence in the explosive growth potential of the industry. Mazza highlighted the active management strategy of the ETF, which focuses on overweighting companies that are actively producing drugs in the market, as well as identifying those in various stages of drug development.
Strong Weighting in Industry Leaders
As of Friday, Eli Lilly and Novo Nordisk each held a significant 20% weighting in the ETF, according to Roundhill’s website. Additionally, Zealand Pharma, Amgen, and Chugai Pharmaceutical were among the top positions in the ETF, each with a weighting of less than 5%. Over the past year, Eli Lilly has seen a 90% increase in stock value, while Novo Nordisk has gained 68% by the end of Friday’s market close.
Despite concerns that investors may have missed out on the recent rally, Mazza remains optimistic about the future of the weight loss drug industry. He emphasized that the industry is still in its early stages with plenty of room for growth. Mazza pointed out that new companies entering the market with more advanced drugs or non-injectable solutions have the potential to drive further growth in the industry.
Drawing parallels to the rise of AI-linked stocks, Mazza sees GLP-1 drugmakers following a similar trajectory. He compared companies like Eli Lilly and Novo Nordisk to Nvidia in the AI space, highlighting their early entry into the market and successful results. Both companies shifted their focus to diabetes and weight loss drugs a few years ago, achieving remarkable outcomes in the process.
Market Response to the ETF Launch
Following the launch of Roundhill’s GLP-1 & Weight Loss ETF last Tuesday, the shares ended the week down by nearly 2%. Despite this initial setback, the long-term potential of the ETF and the industry as a whole remain promising. Investors are keeping a close eye on the developments in the weight loss drug market, with expectations of substantial growth in the coming years.