LIVE MARKETS-Obesity trade morphs into portfolio play

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OBESITY TRADE MORPHS INTO PORTFOLIO PLAY

The obesity trade is no longer a one-drug story.

Goldman Sachs says the market is fragmenting, with oral pills from Eli Lilly LLY.N and Novo Nordisk NOVOb.CO entering the scene and next-generation therapies gaining traction.

That might require investors to think beyond blockbuster launches and toward diversified exposure.

"Breadth and offering more choice for physicians treating a heterogeneous patient population could act as predictors of the leaders vs. the laggards," GS analysts write, wrapping up the takeaways from last week's EASD annual meeting.

With GLP-1 innovation maturing, the focus is now shifting to new mechanisms, personalized care and what these meds can offer beyond obesity, they say.

"Not all patients are the same in terms of responses or treatment goals..." they note.

As a result, without a unifying mega-theme, stock performance will likely now hinge on more idiosyncratic factors such as earnings, pricing, clinical catalysts and M&A.

"This highlights the importance of a portfolio approach to obesity..."

(Danilo Masoni)

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