Selva Perspective: Ozempic
The below is taken from Selva Ventures’ Q1 2024 Quarterly Investor Letter
Starting this quarter we’re trying something new, where we will each share our take on a hot topic in the world of consumer wellness. What better story to kick off with than GLP-1s?
Mainstream adoption and awareness of Ozempic and other GLP-1 drugs has increased dramatically over the past 12 months. We have been following the news stories, learning more about the science behind the drug, and thinking about the impact it will have on our businesses and the broader health & wellness ecosystem. Below are a few resources we have found helpful to learn from over the past few months and our commentary on one of the biggest stories in our space.
Resources
Over the past few months, the Wall Street journal has launched a new podcast series, Trillion Dollar Shot, which covers the history, economic implications, individual experiences, and future outlook of the rise of GLP-1 drugs.
On January 22, the Acquired podcast dropped a 3.5 hour episode that explores Ozempic’s parent company, Novo Nordisk. The episode goes deep into the history and current state of the business and how it will impact the broader economy.
Selva Perspective
Madeline Kaplan: Over the past few months, it has become clear that GLP-1 drugs will have a massive impact our lives and the economy in unexpected ways (e.g., airplanes saving money because passengers weigh less). In our industry, there will be large scale changes in people’s relationship to food and lifestyle. Beyond improving diabetes outcomes, Ozempic and other similar drugs are becoming a popular weight loss tool that works by making people less hungry and therefore eat less food. In the short term, the weight loss results are staggering, but in the long term there may be some negative effects.
There are important lifestyle changes that are essential for combating these negative effects — consuming a healthy, well-balanced diet with an emphasis on protein and a regular exercise routine. We feel that these drugs will have a net positive impact on our portfolio companies and the broader health-focused CPG ecosystem because while overall consumption will be lower, people will spend more on ‘better for you’ options.
Additionally, we are seeing several companies launch natural weight loss and metabolism boasting supplements that are growing in popularity by drawing parallels to GLP-1s. While these supplements won’t have the same miracle ability to change people’s behavior, they can support healthy living by improving metabolic function without the associated cost, side effects, and process required of GLP-1s and may be a better option for consumers seeking less drastic measures to achieve healthier living.
Kiva Dickinson: My thinking on GLP-1s has changed dramatically in the past 12 months. At first, I was frustrated by what appeared to be yet another case of trying to prescribe our way out of a public health problem. Besides, the stats on users shedding lean muscle mass and bone density, and then adding the weight back after stopping the drug, pointed to this being no real solve at all. While Ozempic may appear to be a miracle drug, it is not a magic bullet.
My perspective has evolved with better understanding of how this drug really works, and how it can be a valuable part of a healthy weight loss plan. Madeline recently reframed it in a way I really liked: it’s an addiction management tool that helps to manage unhealthy food habits (habits that have been heavily engineered by our food system). Framed that way it is a first domino in a battle against metabolic dysfunction that needs multiple additional steps, most importantly exercise (with a focus on strength training) and diet (consuming enough protein and fiber) so that lean muscle mass can be maintained while fat is lost.
No matter what, these drugs are here to stay and their potential positive impact on public health is very exciting. We just need to make sure the education and solutions are everywhere to help consumers use these medications the right way.
Please drop a comment on what you think of the format and what suggestions you have for future topics.
