As recent weight reduction medications garnered buzz last yr, analysts’ forecasts signaled these drugs can be blockbusters, with a number of the highest estimates calling for peak sales of at the least $100 billion. In recent days, the expectations are moving higher still. The initial projections were made before Wall Street saw the outcomes of Novo Nordisk’s Select trial in August. The early readout from that study shows semaglutide, which is sold under the brand names Ozempic and Wegovy, could reduce the danger of a stroke or heart attack by 20%. The complete data from the trial will probably be shared in mid-November on the American Heart Association conference. It was also before more people began to take these drugs and report on social media about things they were observing. Patients detailed how much weight they were losing or mentioned that their cravings for food and alcohol disappeared. Some observed that after shedding pounds they now not needed to make use of CPAP machines to treat their obstructive sleep apnea. Meanwhile, the businesses continued to do scientific research on how these drugs might be used to treat a variety of conditions, including liver and kidney disease. Back to the models These developments have fanned the thrill again . In recent days, several analysts have gone back to their models and crunched the numbers again to find out if these projections are too rosy or in the event that they underestimate the category’s potential. Guggenheim analyst Seamus Fernandez published a note Tuesday by which he explained how the whole addressable market for these so-called incretin drugs could balloon to $150 billion to $200 billion. “We reiterate our BUY rankings on each LLY and NOVO.B-CSE as a consequence of the strength of our conviction behind the businesses’ respective GLP-1 franchises and our growing view that GLP-1 based incretins might be essentially the most prescribed class of pharmaceuticals ever by or before 2031,” Fernandez said. He lifted his Lilly price goal to $620 from $474, suggesting nearly 8% upside from where shares closed Friday. LLY YTD mountain Eli Lilly shares have soared yr up to now. Individually, Morgan Stanley analyst Terence Flynn on Thursday said his latest evaluation suggests the bull case of worldwide sales for Eli Lilly’s Mounjaro of $65 billion by 2030 is achievable. Previously, Flynn’s base case scenario called for sales of $44 billion in that timeframe. Mounjaro, which can also be often called tirzepatide, is anticipated to receive approval from the Food and Drug Administration by the tip of this yr to treat obesity. The drug is already in the marketplace as a sort 2 diabetes treatment. NVO YTD mountain Novo Nordisk recently became Europe’s most respected company. Even before this week’s rosy forecasts, shares of Novo Nordisk and Eli Lilly have been climbing. U.S. traded shares of Novo Nordisk, which recently became Europe’s most respected company, are up nearly 41% yr up to now. Lilly has advanced 57% in 2023. Each stocks are trading above their average price targets, in keeping with FactSet. ‘Buy the fear’ The success of those firms have had has been bad news for a bunch of medical device stocks . Dexcom and Insulet , for example, make continuous glucose monitors and insulin pumps. Dexcom shares are off by nearly 15% in 2023, while Insulet has tumbled 42%. On Monday, Canaccord Genuity analyst William Plovanic urged clients to “buy the fear.” “Our net takeaway: near-term impact is little to none and long-term implications are usually not easily determined given lack of knowledge. Due to this fact, we’d buy on the pullback, especially diabetes names DXCM and PODD,” Plovanic wrote. Other analysts have echoed these sentiments, but medical device stocks have continued to fall. DXCM 3M mountain Dexcom shares have struggled in recent weeks. Plovanic’s view is predicated on many aspects, but he mentioned that the prices of GLP-1 medications are high and in the true world — not clinical trials — there may be a big drop-off rate for people taking the drugs. “Interestingly, an evaluation by pharmacy advantages manager Prime Therapeutics of obese patients (not with T2D) found that only 32% of those observed who began taking GLP-1 RAs (half Ozempic/Wegovy, the remainder a mixture of Saxenda or Rybelsus) were still taking the drugs 12 months later despite all participants having insurance coverage,” he said. It is not known what prompted these people to stop treatment. Nonetheless, the trend likely signifies that a portion regained a number of the weight they lost while on the therapy. In a cardiovascular trial, two-thirds of participants’ weight was regained 12 months after they stopped taking the drugs, Plovanic said. “So in summary, it is dear, a majority of the patients stopped taking the drug at one yr and if you happen to stop, the advantages are reversed quickly in a majority of the patients,” he said. All of this could mean that there continues to be business available for firms similar to Dexcom and Insulet, in keeping with Plovanic. Hard to disregard Still, it’s early days, and the overlaps between obesity and chubby and conditions like heart disease, sleep apnea and other illnesses are hard to disregard. Together, these diseases represent an unlimited market, and only a portion of it will should be treated so as for an organization to see large sales gains. GLP-1 medications are already gaining market share. Data provider Iqvia BrandImpact shows that about 30% of name recent diabetes prescriptions are for GLP-1 medications. By comparison, about 23% of all diabetes prescriptions are for drugs on this category. To achieve Guggenheim’s lofty projection, Fernandez assumed that greater than $50 billion in GLP-1 sales will come from patients with diabetes, as treatment with incretin medications becomes the usual of care. GLP-1 stands for glucagon-like peptide-1 receptor agonist. The drug mimics the incretin hormone that’s released within the gut. It helps stimulate insulin production, slows how quickly food leaves the stomach and creates a sense of satiety within the brain. (Mounjaro has a second incretin hormone often called gastric inhibitory polypeptide, or GIP, that has similar effects.) These attributes have helped patients with type 2 diabetes regulate blood sugar levels and have helped people shed kilos. Doctors even have observed falling cholesterol counts and blood pressure levels once in a while, though it’s unclear if it is a function of the medication or weight reduction. It also appears to scale back inflammation. Fernandez sees a complete addressable market of $140 billion to support patients with obesity. He expects there may be a possible for GLP-1 drugs to change into as common and widely used, very similar to statins are used to lower cholesterol. “While it could seem outlandish to place obesity treatments on par with statins, obesity is a visual symptomatic condition that might ultimately end in higher persistence and adherence rates in comparison with oral diabetic agents that don’t impact weight or silent disease similar to [hypertension] and dyslipidemia,” Fernandez wrote in a research note. Dyslipidemia, or an imbalance of lipids similar to cholesterol, can led to severe cardiovascular issues. The Centers for Disease Control and Prevention estimates that 60 million people have this condition. It estimates 120 million people have hypertension, or hypertension, and 140 million are obese or chubby. Morgan Stanley’s Flynn estimates a 30% share of the diabetes market would generate $109 billion on a worldwide basis for GLP-1 drugs. Layer in a 15% to 30% share of the obesity market and that equates to worldwide sales of $97.4 billion to $194.8 billion. Flynn said he expects Novo Nordisk’s Select-Life trial will probably be helpful in understanding how different diseases are linked to at least one one other and what role GLP-1 medicines can play of their treatment. The study is a 10-year observational follow-up, with data collected twice a yr from patients, he said. Information the corporate is searching for includes how the drugs prevent type 2 diabetes, knee alternative surgery, CPAP device usage and cancer, Morgan Stanley said, adding that results will probably be shared over the course of 2023 to 2025. Research is ongoing for using the medications to treat an extended list of ailments, including two phase 3 trials in Alzheimer’s disease. Data from those two studies are expected in 2025. The analysts also warned that with the intention to meet the demand, each Novo Nordisk and Eli Lilly might want to increase their manufacturing capability. Guggenheim’s estimates also assume that oral GLP-1 drugs which are currently in development are in a position to come to market just a few years from now. -CNBC’s Michael Bloom contributed reporting.