JH Explorer in Singapore: Tackling the obesity epidemic
During a visit to Asia, portfolio manager and biotechnology analyst Agustin Mohedas discusses the market opportunity associated with GLP-1 agonists, the new drug tackling obesity.
2 minute watch
Key takeaways:
- Obesity affects hundreds of millions of people worldwide, placing individuals at higher risk of cardiovascular disease, diabetes and even cancer.
- A new class of medicines called GLP-1 agonists have been proven to elicit weight loss of up to 25% and reduce the risk of weight-related diseases by 20%.
- We believe obesity could represent a $100 billion market opportunity, creating meaningful opportunities for investors in the healthcare space.
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IMPORTANT INFORMATION
Health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
Hello, my name is Agustin Mohedas. I’m a portfolio manager and biotechnology analyst at Janus Henderson Investors.
I’ve been travelling throughout Asia for the last week, visiting Seoul, Hong Kong and now Singapore. And what I’ve noticed is a shared love of food throughout these cultures, in particular unhealthy but affordable and really delicious street food, some of which I had last night at a local Hawker centre here in Singapore.
Now, unfortunately, the availability of unhealthy food throughout the world has led to a worldwide obesity epidemic that is actually affecting hundreds of millions of people per year.
Obesity places people at higher risk of cardiovascular disease, including heart attack and stroke, as well as diabetes and even cancer. In fact, half of the people in the world living with diabetes live right here in Asia, and cardiovascular disease has become a leading cause of death in Seoul, Hong Kong and Singapore. Unfortunately, the obesity problem is probably going to get worse before it gets better.
Right now, we are seeing the launch of a new class of medicines that can make a meaningful impact on the obesity epidemic. These medicines, called GLP-1 agonists, are the first medicines to demonstrate up to 25% weight loss, and they’ve also shown an ability to reduce the risk of heart attack, stroke and death by up to 20%.1,2 We believe obesity could represent a $100 billion market opportunity, potentially becoming the largest pharmaceutical market by 2030. This creates really meaningful opportunities for investments and the potential to generate significant returns.
We are seeing accelerating innovation in the obesity space. And at Janus Henderson Investors we are constantly searching for the next generation of therapies and that next opportunity that can benefit both patients and our investors alike.
1 Eli Lily & Co., 8 November 2023
2 Novo Nordisk, 8 August 2023
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Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
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Important information
Please read the following important information regarding funds related to this article.
- Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
- If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
- The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
- The Fund may use derivatives to help achieve its investment objective. This can result in leverage (higher levels of debt), which can magnify an investment outcome. Gains or losses to the Fund may therefore be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
- If the Fund holds assets in currencies other than the base currency of the Fund, or you invest in a share/unit class of a different currency to the Fund (unless hedged, i.e. mitigated by taking an offsetting position in a related security), the value of your investment may be impacted by changes in exchange rates.
- When the Fund, or a share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency (hedge), the hedging strategy itself may positively or negatively impact the value of the Fund due to differences in short-term interest rates between the currencies.
- Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
- The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
Specific risks
- Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
- If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
- The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
- The Fund may use derivatives to help achieve its investment objective. This can result in leverage (higher levels of debt), which can magnify an investment outcome. Gains or losses to the Fund may therefore be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
- If the Fund holds assets in currencies other than the base currency of the Fund, or you invest in a share/unit class of a different currency to the Fund (unless hedged, i.e. mitigated by taking an offsetting position in a related security), the value of your investment may be impacted by changes in exchange rates.
- When the Fund, or a share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency (hedge), the hedging strategy itself may positively or negatively impact the value of the Fund due to differences in short-term interest rates between the currencies.
- Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
- The Fund may incur a higher level of transaction costs as a result of investing in less actively traded or less developed markets compared to a fund that invests in more active/developed markets.
- The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
Specific risks
2 minute watch
Key takeaways:
- Obesity affects hundreds of millions of people worldwide, placing individuals at higher risk of cardiovascular disease, diabetes and even cancer.
- A new class of medicines called GLP-1 agonists have been proven to elicit weight loss of up to 25% and reduce the risk of weight-related diseases by 20%.
- We believe obesity could represent a $100 billion market opportunity, creating meaningful opportunities for investors in the healthcare space.