Americans love their pets: could the success of Novo Nordisk A/S (NYSE: NVO) drugs Ozempic and Wegovy and Eli Lilly And Co's (NYSE: LLY) Zepbound be a model for similar weight loss drugs in the pet market?
What Happened: A recent Bloomberg newsletter outlined several recent developments in the push to introduce GLP-1 drugs to overweight four-legged friends.
Okava Pharmaceuticals and Vivani Medical are reportedly developing weight loss drugs for cats. Okava, a biotech startup, released a study in May that found success in administering the drugs to felines. Better Choice Company Inc (NASDAQ: BTTR) bought Aimia Pet Healthco in February in a push to develop GLP-1 drugs.
Veterinary experts interviewed by Bloomberg expressed skepticism that weight loss drugs are a practical solution for most pets. Other factors, such as a better diet and plenty of exercise, were cited as more sensible choices to help pets battle obesity.
Why it Matters: The pet industry is projected to see substantial increases in size in the coming years. The introduction of weight loss drugs by Novo Nordisk and Eli Lilly has driven both stocks to all-time highs and could be replicated by pet companies.
According to a survey by the Association for Pet Obesity Prevention, approximately 60% of dogs and cats in the U.S. are overweight or obese.
The pet industry has seen an outsized amount of activity in mergers and acquisitions and consolidation, in particular by private equity companies such as Blackstone Inc (NYSE: BX) and KKR & Co Inc (NYSE: KKR).