| Company Name | Date | All-Time High Price | CMP | CAGR |
| NIFTY_PHARMA INDEX | Apr-15 | 14020 | 18815 | 3% |
| Sun Pharmaceutical Industries Ltd. | Apr-15 | 1200 | 1608 | 3% |
| Cipla Ltd. | Apr-15 | 746 | 1480.8 | 8% |
| Dr. Reddys Laboratories Ltd. | Apr-15 | 3807 | 6197.5 | 5.5% |
| Zydus Lifesciences Ltd. | Apr-15 | 400 | 999.85 | 10.7% |
| Divis Laboratories Ltd. | Apr-15 | 984 | 3429.2 | 14.8% |
| Mankind Pharma Ltd. | 2208.2 | |||
| Torrent Pharmaceuticals Ltd. | Aug-15 | 666 | 2551.55 | 16% |
| Lupin Ltd. | Apr-15 | 2115 | 1608.5 | -3% |
| Aurobindo Pharma Ltd. | Apr-15 | 716 | 1019 | 4% |
| Abbott India Ltd. | Apr-15 | 4100 | 27091.7 | 23% |
Hollywood’s choice of weight-loss drugs is now a favorite among India’s rich!
Ozempic and Wegovy — these weight loss injections have been fashioned as a ‘miracle drug’ for those drained by ineffective diets and workout regimes. The buyers in India are mostly of three categories-
- Celebrities who have to look good for the camera – Big names such as Elon Musk and other celebrities have spoken about using Ozempic and Wegovy injections
- Those who have trouble losing weight over a significant period
- Those who are getting married
Ozempic, known generically as semaglutide was approved for use in adults with type 2 diabetes. However, some physicians prescribe it to be used for weight loss. An Ozempic injection needs to be taken once a week, permanently.
Given the hype, semaglutide is gaining traction across India.
Often the injections are sourced into the country from abroad — Danish pharmaceutical company Novo Nordisk patents the production of Ozempic. Novo Nordisk shares have reached a record high following announcing the soaring sales of its obesity and diabetes drugs, Wegovy and Ozempic. Novo Nordisk has experienced a 34.6% growth in sales, reaching *$33.72 billion in 2023 up from $25.05 billion in FY22, elevating the company’s market value past $500 billion in FY24 from $304.5 billion in FY22, and cementing Novo Nordisk’s position as Europe’s most valuable company.
*Around 90% of the drugmaker’s overall sales—$30.34 billion—came from its obesity and diabetes care division, which includes Ozempic and Wegovy, respectively authorized to treat diabetes and obesity.
- Morgan Stanley analysts projected that the global obesity market will reach $77 billion in 2030, an increase from the previously estimated $54 billion.
- The global market for novel weight-loss drugs like Novo Nordisk Ozempic and Wegovy is in such huge demand that spending on them will hit $100 billion by 2035 as patients start to understand the efficacy of the medications.
- The potential benefits of anti-obesity medications extend beyond the pharmaceutical sector, opening up new opportunities for various other industries including apparels and airlines where body weight and structure is key to profitability.
INDIA’S WEIGHT MANAGEMENT MARKET SIZE
As indicated by a report from IMARC Group, a market research company, the India weight management market size reached Rs 1,514.4 crore in 2022, and it is projected to escalate to Rs 2,762.7 crore by 2028, demonstrating a noteworthy CAGR of 10.6 percent during the period from 2023 to 2028.
HOW DOES OZEMPIC BENEFIT THE INDIAN PHARMA INDUSTRY
Novo Nordisk has faced challenges in meeting the demand for Ozempic in several countries where it has already been launched. Additionally, the cost of injections can be as high as Rs 20,000 per shot if procured from a pharmacy that sells imported brands. Its weekly dosage means that a customer will end up paying more than Rs 80,000 a month.
With Novo Nordisk’s blockbuster diabetes and weight loss drug, Ozempic (semaglutide), expected to see a surge in sales, Indian pharmaceutical companies are rapidly racing to manufacture weight loss drugs to gain a competitive advantage by being the first to offer a more affordable alternative, considering the burgeoning potential in both, the domestic and overseas market.
With some analysts predicting the weight-loss market reaching $100 billion a year or more by the end of the decade, executives at Sun Pharma, Cipla, Dr. Reddy’s, Zydus, and Lupin — some of the world’s largest generic drugmakers have started work on Wegovy (anti-obesity medications) versions for the Indian market.
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Novo’s patents for Wegovy, given as a weekly injection, expire in China in 2026, in Japan and Europe in 2031, and the U.S. in 2032, according to its annual report.
Dr. Reddy’s CEO Erez Israeli ” We want to market this product on time in all the markets as (Novo’s) patent expires”. Dr. Reddy’s Laboratories obtained permission from CDSCO, the country’s national regulatory body for cosmetics and pharmaceuticals, to conduct a bioequivalence study on semaglutide, the active ingredient in obesity drugs. - Lupin has also shown interest in forming alliances to address the anti-obesity market in India, responding to an increased demand for Wegovy and Ozempic.
- Sun Pharmaceutical Industries also has obesity drug candidates advancing through various stages of development.
VALUATION OF TOP 10 PHARMA COMPANIES IN INDIA
| Company Name | Market cap (Rs. Cr.) | P/E | P/BV | 5Y Sales Gr(%) | 5Y Profit Gr.(%) |
| Sun Pharmaceutical Industries Ltd. | 3,85,813 | 42.15 | 6.02 | 10.69 | 26.54 |
| Cipla Ltd. | 1,19,555 | 31.59 | 4.52 | 8.47 | 14.67 |
| Dr. Reddys Laboratories Ltd. | 1,03,454 | 19.56 | 3.8 | 11.55 | 36.08 |
| Zydus Lifesciences Ltd. | 1,01,170 | 33.75 | 5.16 | 7.68 | -0.07 |
| Divis Laboratories Ltd. | 91,034 | 66.51 | 7.06 | 14.82 | 15 |
| Mankind Pharma Ltd. | 88,632 | 51.81 | 9.34 | 15.71 | 13.53 |
| Torrent Pharmaceuticals Ltd. | 86,676 | 57.91 | 12.1 | 10.09 | 20.94 |
| Lupin Ltd. | 73,273 | 41.01 | 5.3 | 1.04 | 9.19 |
| Aurobindo Pharma Ltd. | 59,777 | 30.64 | 3.12 | 4.49 | -7.93 |
| Abbott India Ltd. | 57,540 | 51.4 | 17.22 | 10.15 | 20.6 |
We believe that the Indian pharmaceutical sector has not yet reached its full potential in terms of generating wealth. However, with an expected growth of the industry to $65 billion by 2024 and $130 billion by 2030, and increasing foreign direct investments in the pharma sector, we believe that this industry has the potential to become the next big wealth generator. Weight loss drugs like Ozempic can help top pharma companies to achieve significant growth in this huge market where Indian pharma companies can capture a significant market share. Additionally, the launch of Pharma funds by a majority of Asset Management Companies (AMCs) can help boost valuations for pharma companies, thereby creating wealth for its investors in the long run. Investing in Indian pharma stocks developing innovative products like Ozempic can be a great way to benefit from the growth potential of the Indian pharma industry. With an expected growth of the industry, increasing foreign direct investments, and the launch of Pharma funds, it is clear that the pharma sector is a sector where a majority of wealth is to be made.
DISCLAIMER: We are directly or indirectly invested in all of the pharma stocks discussed above for various client portfolios.
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