by Ahmed Metwally
Recent financial data indicates an unexpected rise in demand for continuous glucose monitors (CGMs) by companies like Abbott Laboratories and DexCom despite advancements in diabetes treatments. This increase has been driven by side effects of diabetes medications, necessitating more frequent blood sugar checks. Both Abbott and DexCom have reported significant sales growth in their CGM systems, a trend expected to continue positively impacting market performance. This highlights the growing synergy between diabetic drug therapies and glucose monitoring for patient safety.
In the retail, food, and beverage sectors, companies are adjusting to the impact of new weight-loss drugs. Conagra is considering changing snack portion sizes due to shifts in consumption patterns. Walmart anticipates increased health and wellness product sales, while PepsiCo has not yet seen significant business impact from these medications.
For dialysis service providers, Germany’s Fresenius Medical Care foresees a neutral effect on kidney dialysis demand due to drugs like Ozempic, while Davita expects limited impact as the drugs might benefit only certain kidney disease patients.
Medical device makers are also adapting. Johnson & Johnson reported decreased sales for abdominal surgery devices, as more obese patients opt for weight-loss drugs like Wegovy and Ozempic. They anticipate an eventual increase in orthopedic surgeries, such as hip and knee replacements. Abbott Laboratories expects diabetes patients to use glucose monitors alongside weight-loss drugs long-term. Insulet Corp predicts these drugs will delay insulin dependence but not significantly impact the insulin pump market long-term. Intuitive Surgical noticed a slowdown in US growth rates for weight-loss surgery but does not expect extended use of these drugs. Boston Scientific foresees a minimal impact on its heart devices from weight loss drugs.
Drug distributors like Cencora, Cardinal Health and McKesson anticipate a boost in revenues from the growing demand for weight-loss drugs.
On October 9th, 2023, the stocks of Coca-Cola and PepsiCo dropped after Walmart’s CEO reported that customers on drugs like Ozempic and Wegovy are purchasing fewer and lower-calorie groceries, indicating changing consumer behaviours. Coca-Cola and PepsiCo’s shares fell by 4.8 per cent and 5.2 per cent, respectively. Analysts suggest the food and beverage industry must adapt to this trend, evidenced by fluctuations in Coca-Cola and PepsiCo’s bond trading and changes in their market positions.
Disclaimer: At the time of publication, the author had no position in the securities mentioned. Trading stocks, futures, options and Index options are considered substantial risk and can result in wiping off the entire trading account. Trading on margin can result in margin calls and forced liquidation, especially with high fluctuations in any instrument. Please trade with expertise and take your decisions accordingly.
Ahmed Metwally is an independent consultant and stock analysis coach. He has been an active stock and option trader in the last two decades. Ahmed is serial Entrepreneur and a businessman with an MBA from University of Alberta, Canada. His opinion and speculation are not investment advice by any means.
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