Ozempic Maker Novo Nordisk Competes For China

Good morning, Nerders. It’s Tuesday, July 2nd. In today’s newsletter (3-minute read), we cover:

• Weight loss drugs battle for market share in China

• Why adult children are living at home + downstream implications

• Unlicensed cannabis operations are undercutting the legal cannabis market

TODAY’S STORY

China is estimated to have the world’s largest obese population.

According to media reports, experts at the China Obesity Conference (COC2023) shared that over 50% of Chinese adults are overweight or obese (~706 million people, more than 2x that of the entire U.S. population), and that number is increasing.

On Tuesday, Novo Nordisk, the multinational pharmaceutical company behind popular weight-loss drugs Ozempic and Wegovy, said that Chinese health officials approved Wegovy for sale as a weight-loss drug. Its other drug, Ozempic, has been available in China since 2021, and the company reported sales in China of $452 million last year.

Novo Nordisk has a short window: Mainland China is a key growth area for the company. However, its patent on semaglutide, the active ingredient in Ozempic and Wegovy, is set to expire in China in 2026.

The competition is heating up: At least 15 generic versions of Ozempic and Wegovy are being developed by Chinese companies, and 11 Chinese semaglutide drug candidates are in the final stages of clinical trials. American manufacturers like Eli Lilly, whose diabetes drug Mounjaro received approval from China in May, also compete in the market.

One issue to watch is price. China’s stagnant economy is making more of its population price-sensitive, which could leave room for considerable growth in cheaper Chinese-made copycat drugs.

DATA BYTES

Young Adults Living at Home

• This survey found that 51% of young adults live at home to save money, and 39% say they do so because they cannot afford rent.

• Potential winner: luxury retailers—savings on daily necessities like rent and groceries are freeing up disposable income for discretionary spending (per Morgan Stanley analysts)

#SHORTS

Weed is legal, so why is its black market still thriving?

@boringbusinesskieran

Weed is legal, so why is its black market still thriving? #business #businesstiktok #markets #foryou

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PREVIOUS STORIES

Stonks: In 2023, Abercrombie & Fitch’s stock gained 285%, outpacing Nvidia’s 239% surge, and the momentum has carried into 2024.

Ah, didn’t expect that: More young people are ditching college and picking up skilled trades, contrary to the prevailing narrative.

Airline trouble: Southwest is contemplating radical changes to its amenities that previously helped it become a fan-favorite. Southwest’s operating expenses have ballooned from an increase in fuel, labor, and airport costs, which has cut their profit margins.

Sorry, future Airbnb millionaires: Buy an investment property, rent it as a short-term rental, and live off the profits. Sounds great, but in today’s market, probably not.

Apple Pay or we don’t pay: 78% of Gen Zers say they’d stop shopping at merchants that don’t accept digital wallets like Apple Pay or Google Wallet.

To read the web version of previous stories, click here

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Thanks for reading,
Kieran & Justin Ryan