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Not everyone loses weight on Ozempic, creating potential investment opportunities



In the world of weight loss medications, GLP-1 medications like Ozempic have been making headlines for their ability to help patients drop pounds. However, despite the success stories, many individuals may still remain obese or overweight even after taking these drugs. In clinical trials, Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound have shown promising results in helping patients lose significant amounts of weight. But for severely obese patients, there may still be a long journey ahead to achieve a healthy weight and address conditions like obstructive sleep apnea. Medical device companies have taken notice of this trend and are positioning themselves to capitalize on the potential increase in the market for bariatric surgery and sleep apnea treatment.

While the impact of anti-obesity medications on bariatric surgery and sleep apnea treatment remains to be seen, analysts are closely watching the trends in these areas. Companies like Intuitive Surgical, Medtronic, and Inspire Medical Systems are poised to benefit if there is a surge in demand for these treatments. However, the bariatric surgery market has not seen a significant uptick yet, and shares of Inspire Medical Systems have been under pressure due to fears that new weight loss medications may reduce their market opportunity. The upcoming release of fuller data on Zepbound’s phase 3 trial at the American Diabetes Association annual meeting in June is expected to raise awareness about sleep apnea and potentially lead to increased treatment for the condition.

Sleep apnea is a serious sleep disorder that can have significant health consequences if left untreated. Obstructive sleep apnea occurs when the muscles in the throat relax and collapse, causing interruptions in breathing during sleep. Patients with sleep apnea often experience fatigue, reduced productivity, and an increased risk of cardiovascular disease and stroke. Inspire Medical Systems CEO Tim Herbert is optimistic about the potential for anti-obesity medications like Wegovy and Zepbound to help patients qualify for their implantable device, which can help keep the upper airway open during sleep. Patients who have not benefited from treatment with CPAP machines or oral devices may find relief with the Inspire device.

Despite the recent selloff of Inspire Medical Systems shares, analysts like Anthony Petrone from Mizuho Securities believe that the decline is an overreaction. Petrone rates Inspire shares a buy and has a price target of $250, more than 50% higher than the current share price. He anticipates that if Zepbound receives a label expansion to treat sleep apnea, it may not happen until next year. However, he sees positive developments on the horizon for Inspire, such as the FDA’s clearance for more patients to qualify for the Inspire device and expanding insurance coverage. As insurers like UnitedHealth expand coverage for the device, more patients with obesity and severe sleep apnea may have access to this potentially life-changing treatment. While there may be a transitional period for Inspire shares as the market landscape evolves, analysts remain bullish on the company’s long-term prospects in the bariatric surgery and sleep apnea treatment markets.

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