Health Stocks Eye Worst Year in Decades as Obesity Drugs Upend Market
- Health sector underperforming S&P 500 Index by most since 1999
- Investors fear obesity drugs to cut profits of other therapies
Wegovy and Ozempic’s owner, Novo Nordisk A/S, has rallied 17% in Copenhagen trading.
Photographer: Carsten Snejbjerg/BloombergHealth-care stocks are heading for their worst annual performance relative to the broader market in almost 25 years as a new class of weight-loss drugs looks set to reorder the market for a host of existing profitable treatments.
The group — which includes the likes of Pfizer Inc. and CVS Health Corp. — is one of the worst performers in 2023, lagging behind the S&P 500 by 18 percentage points. Medical-device makers have been particularly hard hit as speculation mounts that the mania for weight-loss injections, like Ozempic and Wegovy, will improve overall health for millions of Americans. Diabetes-device maker Insulet Corp. and Dexcom Inc. have each lost roughly one-third of their value so far this quarter. In contrast, Eli Lilly & Co., which is developing its Mounjaro diabetes medicine for obesity, is up roughly 18% in the quarter, while Wegovy and Ozempic’s owner, Novo Nordisk A/S, has rallied 17% in Copenhagen trading.