A top exchange-traded fund provider is betting on the long-term popularity of the GLP-1 weight-loss drug.
Roundhill Investments’ GLP-1 & Weight Loss ETF (OZEM) started trading last week and emerged as a leader Eli Lilly and Company and Novo Nordisk Work with players to develop new treatments for weight loss and diabetes. Chief Executive Dave Mazza said his company is capitalizing on the industry’s explosive growth potential.
“The ability to actively manage those companies that are actually producing drugs in the market and then further identify those companies that are at a certain stage is powerful,” Mazza told CNBC’s “ETF Edge” last week.
As of Friday, Eli Lilly and Novo Nordisk each held about 20% of the ETF, according to data from the Roundhill website. The next three largest positions are at Zealand Pharma, Amgen and Chugai Pharmaceuticaleach weight is less than 5%.
Eli Lilly’s shares were up 90% in the past year as of Friday’s close, while Novo Nordisk’s shares were up 68%. Mazza dismissed concerns that investors missed out on the rally, noting that it’s still “early days” for the weight-loss drug industry.
“There’s a lot of room for the market to grow as other companies come on board, whether they’re more powerful drugs or things that don’t actually require an injection.”
He also believes that the development trajectory of GLP-1 pharmaceutical companies is similar to that of artificial intelligence-related stocks.
“It’s kind of like thinking Nvidia and artificial intelligence. They just got a head start,” Mazza said. “(Eli Lilly and Novo Nordisk) pivoted a few years ago to focus on diabetes and weight-loss drugs and were able to get to market and achieve impressive results.
Shares of Roundhill’s GLP-1 & Weight Loss ETF fell nearly 2% this week after launching last Tuesday.
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