There is a bottomless appetite for news about weight-loss drugs. We cannot hear enough about the celebrities, politicians and tycoons – including Elon Musk, Boris Johnson, Sharon Osbourne and Oprah Winfrey – who have used Ozempic or Mounjaro.

In Britain, such has been the increase in uptake of these GLP-1 drugs that supermarket sales are shrinking.

Sometimes this kind of coverage can have a wider message for investors.

Public figures’ reliance on ‘fat jabs’ underlines the forecast that the global market for these products could grow from the current $30billion (£22.4billion) to more than $150billion by the end of the decade, as millions seek a route out of obesity.

So could you add weight to your portfolio by taking a slice of Eli Lilly, the US maker of Mounjaro, which is now being prescribed by GPs? Or should you opt for Novo Nordisk, the Danish giant that produced blockbuster brands Ozempic and Wegovy?

An opportunity could lie in the weakness of shares of these ground-breaking businesses. Over the past year, Eli Lilly is down 13 per cent and Novo Nordisk has tumbled by 53 per cent.

Obesity answer: The global market for these products could grow from the current $30billion (£22.4billion) to more than $150billion by the end of the decade

Will James, manager of the Guinness European Equity Income Fund, says: ‘Novo Nordisk has been in the eye of the storm of late and its fall from grace has been impressive.’

The two companies are battling not only against each other, but also with rival start-ups against a tense political background in the US.

This is the largest market for weight-loss drugs, but US health secretary Robert F Kennedy Jr is not a fan. He wants to drive down the cost of all drugs. But he also believes that overeating is not the prime cause of obesity. He said: ‘American kids did not suddenly get gluttonous and lazy – something is poisoning them.’

Kennedy points the finger at the food companies. Although his assertions may not have any basis in fact, firms in this industry are already concerned about the impact of fat jabs on eating habits. The consultancy company Kantar says that lower supermarket sales have coincided with increased uptake of GLP-1 treatments. A year ago, 2.3 per cent of UK households had one member using GLP-1. It now stands at 4.1 per cent.

NOVO NORDISK

A bet on Novo Nordisk is a gamble on a corporate comeback.

Almost exactly a year ago, the shares – priced in DKK, or Danish krone – were at their peak of Kr.1,208, against Kr.441.

The pharmaceutical giant, set up a century ago, was greater in size than the Danish economy, and had become what James describes as ‘the flag bearer for Europe’s sometimes-doubted ability to innovate’.

Today, Novo Nordisk looks more vulnerable than all-conquering. So much so that the activist hedge fund Parvus Asset Management has been amassing a stake, presumably to force a shake-up.

Shot in the arm: There is a bottomless appetite for news about weight-loss drugs

Also pressing for change is the largest shareholder, the Novo Foundation. This follows the unseating in May of Novo Nordisk’s chief executive Lars Fruergaard Jorgensen, only the fifth person to have held this role in the company’s history.

His departure was spurred by Eli Lilly’s rapid seizure of market share in the US, where Mounjaro is the most-prescribed drug. Novo Nordisk remains the global leader, however.

The problems began last year when Novo Nordisk could not satisfy demand for its drugs, leading to a damaging surge in ‘compounding’.

Under this arrangement, pharmacies can mix cheap copycat versions of drugs: the customers of US online telehealth companies, such as Hims & Hers Health, proved to be more than keen on ‘Ozempic dupes’.

The situation was exacerbated by the poor performance in a trial of new weight-loss treatment CagriSema. But Novo Nordisk is trying to shift the perception of the drug with its additional cardiovascular benefits.

Meanwhile, Amycretin, another new-generation drug, appears to be delivering results superior to Mounjaro. Amycretin is administered as a once-weekly injection and a daily pill.

A few months ago there may have been speculation that Novo Nordisk could turn out to be the pharmaceutical equivalent of MySpace – the pre-eminent social media site that sank into obscurity when Facebook emerged. However, in recent weeks the pessimism surrounding the company has lessened.

James says: ‘This is a high-quality, high-return business with an impressive track record of success and improving people’s lives.’

The shares are on a p/e ratio (a guide to value) of 17 times earnings. At the height of Novo Nordisk’s hype, this was 40 times. This upbeat assessment is shared by brokers. In the past few days, Barclays, Deutsche, JP Morgan and UBS have reiterated their ‘buy’ recommendations.

ELI LILLY

Eli Lilly might be best known for Mounjaro, but its pipeline includes cancer and diabetes drugs and products for Alzheimer’s and Crohn’s disease.

Established in 1876, it has also just snapped up the gene-editing start-up Verve Therapeutics for $1.3billion as a way to expand beyond weight-loss drugs, while making the most of its expertise in this area. If approval is forthcoming, Eli Lilly plans to launch Orforglipron, a once-a-day pill, next year.

This represents considerable progress for a business once most-closely associated with the anxiety medication Prozac, which is no longer manufactured.

The scope of Eli Lilly’s range evidently inspires confidence, since 17 of the 29 analysts that follow the company rate the shares a buy with an average target price of $951, against the current $780.

Putting some money into Eli Lilly and Novo Nordisk makes sense if you are diversifying your portfolio this summer and want to invest in innovation.

However, both Novo Nordisk and Eli Lilly face huge competition, with about 150 rival products in development. Not all are guaranteed immediate success. This week, for example, shares in the US pharmaceutical company Amgen slipped by 6 per cent on news that its MariTide weight-loss injectable caused vomiting.

Novo Nordisk is one of the top ten holdings at the giant Fundsmith fund. However, its portfolio no longer includes the drinks group Diageo, in a wider shift triggered by the impact of weight-loss drugs.

Companies such as Associated British Foods, McDonald’s, Mondelez, Nestle, PepsiCo, Tate & Lyle and Unilever are aware of the need to adapt as consumers move away from alcohol, confectionery, fizzy drinks and snacks.

They must shape up for the fat-jab age – or face investors’ ire.

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