Weight loss drug ETF bets big on Eli Lilly, Novo Nordisk

A leading provider of exchange-traded funds is betting on the long-term popularity of GLP-1 weight loss drugs.

Roundhill Investments’ GLP-1 & Weight Loss ETF (OZEM), which began trading last week, links leaders Eli Lilly And Novo Nordisk with players developing new treatments for weight loss and diabetes. CEO Dave Mazza said his company is benefiting from the explosive growth potential in the sector.

“The ability to have active management to consider companies that are actually in the market to produce the drugs and then walk the line to identify the companies that are at a particular stage is powerful,” Mazza told recently Monday on CNBC’s “ETF Edge.”

Eli Lilly and Novo Nordisk each have a weighting of about 20% in the ETF, according to Roundhill’s website as of Friday. The next three largest positions are Zealand Pharma, Amgen And Chugai Pharmaceuticaleach of which has a weighting of less than 5%.

Over the past year, Eli Lilly is up 90%, while Novo Nordisk is up 68% as of Friday’s market close. Mazza dismissed concerns that investors have missed the rally, noting that the weight-loss drug industry is still in its infancy.

“The market has plenty of room for growth and other companies are coming in, whether it’s more powerful drugs or things where you don’t actually need an injectable drug.”

He also sees GLP-1 drugmakers following a similar trajectory as AI-linked stocks.

‘It takes a bit of thinking Nvidia with AI. They just have an advantage,” Mazza said.[Eli Lilly and Novo Nordisk] A few years ago we focused on diabetes and weight loss drugs, were able to enter the market and achieve remarkable results.”

Following last Tuesday’s launch, shares of Roundhill’s GLP-1 & Weight Loss ETF finished the week down almost 2%.