Limited supplies of weight-loss drugs that—seeminglyඣ overnight—soared in popularity have only fueled the market, as more companies rush to enter the field and analysts expect sales to grow.

Drug Shortages Boost Sales Outlook

Pfizer is scrambling to field its own weight-loss elixir, while Novo Nordisk and Eli Lilly have struggled to keep up with demand as sales of their weight-loss drugs exploded in the last year. Novo Nordisk's Wegovy and Ozempic as well as Eli Lilly's Mounjaro skyrocketed in popularity as social media have hyped the results of the medications.

Last week, the U.S. Food and Drug Administration revealed that Saxenda, Novo Nordisk's weight-loss drug that preceded its blockbuster Wegovy release, also faces limited availability through the end of the year. That's because patients unable to obtain Wegovy—or Ozempic or Mounjaro—have turned en masse to Saxenda.

Meanwhile, Pfizer appears on the verge of gaining FDA approval for an oral alternative to Novo Nordisk's weight-loss lineup and Eli Lilly's Mounjaro, which are available via injection only.

Consumer demand is so insatiable that Morgan Stanley now expects 50% global revenue growth in weight-loss drugs this year, up from 30% in 2022.

Size and Scope Of Weight-Loss Drug Demand

Longer-term, the firm recently raised its 2030 forecast for the global obesity drug market by 43%. It now expects global sales to reach $77 b❀illion annually by 2030—or almost $10 a year for every person on Earth.

If the weight-loss drug market were to reach the forecast, it would equal a third of the expected size of the global market for all cardiovascular drugs by the end of the decade. And that market presumably could shrink if weight-loss drugs help broadly improve the heart health of the global population.

Detracting from Diabetes?

Unlike Wegovy, Ozempic and Mounjaro also have not yet received full FDA approval as weight-loss therapies. Instead, they're approved only to treat Type-2 diabetes, though doctors widely have prescribed them off-label for weight loss.

That prac🧜tice and the surging demand has limited the availability of drugs desired by overweight patients and created a problem for those with diabetes trying to secure drugs for th🐲eir approved uses.

At the same, Morgan Stanley notes in a recent research report that the surging demand for such weight-loss drugs or other so-called "GLP-1" medicines strictly for diabetes, indirectly has a supported a "profound acceleration" of diabetes patients seeking the same medicines.

However, e🌟ven as Pfizer and other pharmaceutical firms try to encroach the GLP-1 market, the firm sees Novo Nordisk and Eli Lilly retaining their first-mover advantage. Long-term, it predicts the two companies should retain 82% of the global GLP-1 market.

Insurance, Social Media Broke 💃The Weight-Loss Drug Market

The demand craze partly reflects 🍌the increased willingness of insurance companies to reimburse patients for Wegovy prescriptions.

But Morgan Stanley said social media hype also caused it to boost its 2030 forecast to account for "exponential" rather than "linear" increases in demand.

"Our analysis shows that social media has created a recursive cycle of education, word of mouth and heightened demand for weight-loss drugs," the firm's report said.

Word of mouth has helped push shares of Novo Nordisk and Eli Lilly up 43% and 41%, respectively, in the past 12 months. Morgan Stanley's current price targets project additional gains of 10% and 21%, respectively, in the next 12 months.