The “Miracle Drug” Impact
DEMAND TRIVIA
Eli Lilly’s new obesity drug, Mounjaro (tirzepatide), a dual GIP and GLP-1 receptor agonist, is sometimes called the "Miracle drug" by the medical and weight loss world. It is already a mega-blockbuster drug, and poised to make a significant impact on more than the obesity treatment sector.
While Mounjaro's efficacy in weight loss could diminish the demand for existing obesity/diabetes medications, this new class of drugs also shows promise for treating comorbid conditions associated with obesity such as hypertension, cardiovascular disease, and sleep apnea. That’s because as Mounjaro addresses obesity more effectively, the occurrence of these comorbidities would decrease, leading to reduced use of treatments for related conditions.
Take the sleep health sector as an example. Obesity is a major risk factor for obstructive sleep apnea (OSA), a condition where excess body weight contributes to airway obstruction during sleep. Mounjaro’s effectiveness in achieving significant weight loss could lead to a reduction in the prevalence and severity of sleep apnea. As patients lose weight, they might experience fewer symptoms or even achieve remission from sleep apnea, reducing their need for traditional treatments.
The prevailing diagnostic method is a sleep study in an outpatient sleep center run by companies such as SleepMed, and the most commonly used treatment option to alleviate sleep apnea is to use a CPAP machine during sleep time, a mask combined with an airflow machine made by companies like Philips Respironics (PHG) or ResMed (RMD). With fewer patients needing weight-related sleep apnea management, there could be a decline in demand for CPAP devices as effective weight loss with Mounjaro potentially alleviates the need for these devices.
While Philips has a more diversified healthcare business portfolio, ResMed is more reliant on sleep disorder-related sales. It derives approximately 70% of its total revenue from its sleep disorder business, which includes the production and sale of devices like CPAP machines, masks, and other accessories used to treat sleep apnea and related conditions.