Like every summer, publicly traded companies reported their second-quarter results while Americans bared their bodies on the beach. But this year the timing was right. In several earnings calls in August, chief executives reassured investors that the Ozempic revolution had not failed them and that they could somehow share in the rapid success of new diabetes and weight-loss drugs.
“It puts us in a good position to be a solution for those who use drugs,” said Dan R. Chard, chief executive of Medifast, a maker of diet products such as shakes and protein bars, adding, “They’re looking.” Leadership.” He told analysts this while explaining that new-generation drugs contributed to a 34.7 percent year-on-year decline in profits.
“We will continue to investigate this,” Michael Johnson, chief executive of supplement maker Herbalife, told investors. “And if we see an opportunity to capitalize on that, we will.”
In theory, this opportunity – both to make profits and to lose fortunes – could be enormous not only for the companies behind these drugs, but also for some in completely different industries.
The drugs, known as GLP-1 drugs, are already making big profits. Novo Nordisk makes both Ozempic, approved only for type 2 diabetes, and its close relative Wegovy, approved for weight loss. They mimic a glucagon-like peptide that regulates appetite in the brain and makes people feel full for hours. Together, they helped Novo’s profits rise 32 percent in the first half of this year, and Novo’s market value is now larger than that of the entire Danish economy. Eli Lilly’s sales rose 28 percent in the second quarter, thanks to another diabetes drug, Mounjaro, which the Food and Drug Administration may approve for weight loss this year.
And the full potential isn’t even clear yet. The market for weight-loss drugs is huge: There are about 750 million people with obesity worldwide, including about 42 percent of adults in the United States, where obesity-related diseases cost billions of dollars in health care costs each year. But Novo says GLP-1 drugs could eventually have other uses, such as preventing cardiovascular disease in overweight adults. There is evidence that they could treat addiction and even Alzheimer’s disease.
“The market potential is very, very large,” Novo CFO Karsten Knudsen told me when I visited the company in June. “We are moving in unusual territory.”
Diet companies are preparing for disruption. For decades, weight loss companies have relied on pre-packaged, branded meals and lifestyle programs. Some, like WeightWatchers and Noom, are scrambling to sell GLP-1 drugs themselves, while others are still hoping their products can survive the Ozempic era. Jenny Craig closed its weight loss centers in May after 40 years. And Simply Good Foods, which sells Atkins diet products such as frozen meals and cookies, will market Atkins as a “perfect complement for people thinking about taking the medication,” the company’s then-CEO Joe Scalzo told analysts in June.
The ripple effects are expanding. Retailers like Walmart, Kroger and Rite Aid say GLP-1 prescriptions are drawing more people to stores where they make other purchases. Walmart Chief Executive Doug McMillon told analysts in August that executives “expect percentage growth in consumer staples and health and wellness, primarily due to the popularity of some GLP-1 drugs.”
Geoff Martha, Medtronic’s chief executive, said the company had seen a “modest” decline in bariatric surgery, probably because people were choosing weight-loss drugs instead. And some analysts believe the drugs could disrupt the American diet.
“If you eat fast food every day, you’re probably going to continue to eat fast food every day,” James van Geelen of Citrinas Capital Management said on Bloomberg’s “Odd Lots” podcast. “You’ll just eat a lot less of it.”
Still, there is room for other approaches to combat obesity. “These drugs are groundbreaking, but they come with an asterisk,” said David Ludwig, an obesity specialist and pediatrics professor at Harvard Medical School. (The side effects of the drugs are long.) “Even if you can use drugs to reduce the weight of the entire population, it does not eliminate the risks of poor nutrition.”
Full of cash, Novo agrees. “We need to think about what’s next,” Camilla Sylvest, executive vice president of commercial strategy, told me. In June, the company opened an obesity prevention facility near Copenhagen to research how to stop the disease before people have to take weight-loss drugs. — Vivienne Walt
IN CASE YOU MISSED IT
The US job market looks like it used to. Employers added 187,000 jobs in August, the Labor Department reported Friday, and unemployment rose to 3.8 percent as the economy continued to lose momentum following pandemic lockdowns.
Commerce Secretary Gina Raimondo visits China. It had the difficult task of promoting trade between the two superpowers while adhering to restrictions on technology exports imposed in the name of America’s national security. The two countries agreed to establish new dialogues, including a working group on trade issues.
The White House names the first drugs targeted for Medicare price negotiations. The long-awaited list of 10 drugs will be the subject of a groundbreaking new program designed to reduce costs for Medicare. Drugmakers have fought the plan, including in court, and Republicans have criticized the initiative as government overreach.
UBS reports quarterly profit of $29 billion, with an asterisk. The huge gain – the largest in banking history – comes from the bank’s acquisition of rival Credit Suisse this spring for about $3.2 billion, a significant discount that is distorting UBS’s results. But it belies the challenges UBS faces as it completes the biggest bank takeover since the 2008 financial crisis.
The last boss
When Emily Weiss stepped down last year as CEO of Glossier, the skincare and beauty brand she founded in 2014, some called it the end of the “girlboss.” This archetype — media-savvy female founders with risk-taking, millennial-focused startups — was advanced by “#Girlboss,” the 2014 memoir by Nasty Girl founder Sophia Amoruso.
Glossier changed the way women shop for makeup with its direct-to-consumer model and voice-y website, eventually reaching a $1 billion valuation. But the brand stumbled when it struggled to penetrate brick-and-mortar retail. was criticized by retail workers who alleged a toxic, racist work environment; and shelved projects like a makeup line that deviated from her dewy, barely-there look.
DealBook spoke with Marisa Meltzer, author of the upcoming book Glossy: Ambition, Beauty, and the Inside Story of Emily Weiss’s Glossier, about what lessons we can learn from Weiss and the #Girlboss movement.
This interview has been edited and condensed for clarity.
Can you contextualize the #Girlboss movement?
It was pretty insulting and tiny. Nobody but Sophia called themselves a girl boss. But it was also something that benefited them because it sparked interest. For them, it was a way to get the press to know about their companies, which wasn’t the typical things female founders and CEOs sometimes had to do, like a fashion editorial.
At the time there was a big debate about whether the press had reported on the scandals at companies like… Outside voices, Man Dispeller And Shinier different if they had men at the top. What do you think?
I think there was a bit of bloodlust. These women were propped up in a way that was kind of annoying – I’m sure it was annoying to them too.
Some of these companies have had real problems, such as being sued for firing pregnant employees. And other companies, like Glossier, complained that the workplace wasn’t ideal, especially for their retail employees. This is different than criminal behavior.
The reality is that these companies were not the same. The women at its top were not all the same. And they didn’t make the same mistakes. And they didn’t have the same success either.
What happens to Glossier now?
Glossier appears to have taken the time since Emily stepped down to reevaluate. They decided to get into retail really late. They launched at Sephora last February. The larger task they are trying to accomplish is to better position the company for an exit.
Who could buy them?
A company like Estée Lauder, which owns many boutique brands, would make sense. There’s also Kering, the fashion house that owns Gucci, which has made some visible moves to penetrate more into the beauty market.
On our radar: The story of Carlos Ghosn
In 2019, when former Nissan executive Carlos Ghosn was charged with financial misconduct, he skipped bail and fled Japan in an elaborate plot involving a private jet and a trunk with drilled breathing holes. At the time, DealBook called it “a film-level caper,” and two projects – one from the BBC and one from Netflix – quickly put it on video. But it didn’t do as well as a four-part Apple TV+ documentary series released last week has been published.
“Wanted: The Curious Case of Carlos Ghosn” is produced by the Wall Street Journal and is based on a book by two of its reporters. With Ghosn’s participation, it tells the thriller-like drama of one of the most memorable economic stories of this decade, exploring its nuances.
“The series explicitly asks the question of Carlos Ghosn: victim or villain?” Adrian Horton of the Guardian writes. “With blurred lines, overlapping narratives, and convoluted paper trails, it’s hard to come up with a simple answer.”
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