Weight-loss drugs have caught the attention of investors and shaken up other sectors in the past year or so. Novo Nordisk and Eli Lilly were early winners of the trend, with their drugs dominating the weight-loss drug market. The two companies have “a very strong monopoly,” said Yuri Khodjamerian, fund manager at Tema ETFs. “But clearly there’s going to be room for such a large market. The estimate is currently around $130 billion from Goldman Sachs. We think it’s going to be a multiple of that,” he told CNBC Pro Talks last week. Khodjamerian believes there’s room for at least three players in the space. “I think the market is big enough for three to four players, even at the market cap that’s there now, but the market is trying to figure out who the third or fourth player is, and the big breakthrough could be oral GLP-1s,” he said, referring to GLP-1, a class of weight-loss drugs originally developed as a treatment for diabetes. GLP-1 is a hormone secreted in the gut that stimulates insulin release, slows stomach emptying and transmits a feeling of well-being to the brain. Stocks to watch Khudjamirian pointed to Amgen, which is developing an injectable drug and other products for obesity. He also pointed to some biotech names that have potential but that investors should be wary of. One of them, he said, is Carmot, which was acquired by drugmaker Roche last year. He also mentioned smaller biotech companies like Zealand Pharma and Viking Therapeutics. “These are early-stage biotech companies that are developing data. They’re much riskier than larger companies that already have drugs on the market,” Khudjamirian said. “So you have to be very careful when investing in these companies. So a diversified portfolio is probably the best way to go.” Tema ETFs offer actively traded funds, focusing on healthcare and life sciences. Khudjamirian is also the chief investment officer of TEMA ETFs and manages the Monopoly & Oligopoly ETF, which aims to provide investors with long-term growth through companies that operate in monopolistic industry structures. Khudjamirian highlighted three ETFs his firm manages in the healthcare sector: the TEMA GLP-1 Obesity & Cardiovascular ETF; the TEMA Oncology ETF; and the TEMA Neuroscience & Mental Health ETF. He said there is a “valuation opportunity” in biotech stocks right now, but cautioned against the risks. “It’s hard to pick smaller companies in biotech,” he said. “You have to really know what you’re doing, and … in most of our biotech portfolios, we have 50 stocks, and we don’t have more than 1% or 2% in some of these companies because of these risks, and they can go down to zero.” However, Khodjamirian said there is “a lot” of innovation happening in biotech, and “a lot” of it is trading below cash on its balance sheet. “So there is a valuation opportunity,” he added.
Trending
- Two big tests are coming that will determine whether last week's stock market excitement was justified.
- How a 'seriously outstanding tax debt' can lead to your passport being revoked
- Hezbollah fires rockets at Israel in revenge for its supreme leader
- Boeing Starliner Returns Empty, NASA Enlists SpaceX to Transport Astronauts
- Dividend Stocks Are a Hot Pick in the Fall Due to the Fed and Interest Rates
- Biden speaks with Zelensky, announces new military aid to Ukraine
- Meta says WhatsApp accounts linked to Iranian hackers targeted Biden, Trump
- Stocks with the biggest moves in the middle of the day: CAVA, INTU, ROST, WDAY
Fund Manager Talks About Names in Weight Loss and Biotechnology
