Short-term negative turns into long-term positive! Bernstein: Weight loss drugs are expected to expand the market for weight loss surgery.

Zhitong App learned that Bernstein released a research report stating that GLP-1 class weight-loss drugs developed by Novo Nordisk AS (NVO.US) and Eli Lilly are becoming increasingly popular and can expand the market for weight-loss surgery in the long run.

For a long time, weight-loss drugs from Novo Nordisk AS and Eli Lilly have been considered one of the reasons for the decline in the number of weight-loss surgeries.

Bernstein analyst Lee Hambright quoted a survey of 50 weight-loss surgeons in the United States, pointing out that since the promotion of GLP-1 drugs, the average number of weight-loss surgeries has decreased by about 11%.

Leading operators including Intuitive Surgical (ISRG.US), Medtronic (MDT.US), and Johnson & Johnson have expressed similar views.

Joaquin Duato, CEO of Johnson & Johnson, said that GLP-1 drugs have an impact on weight-loss surgery at least in the short term. Subsequently, the stock prices of Intuitive Surgical, Medtronic, and ReShape Lifesciences (RSLS.US) came under pressure in October last year.

"Our weight-loss business will be affected in the short term. Some patients are reconsidering surgery in the hope of receiving treatment," Duato said during the company's third-quarter 2023 earnings conference call.

Bernstein analysts believe that although the number of surgeries may face some pressure in the short term, the extent of its long-term impact has not yet reached a consensus. They added, "The conclusion that the increase in weight-loss drugs will come at the expense of weight-loss surgery may be a bit hasty."

Due to affordability, insurance coverage, side effects, and long-term medication compliance, there are doubts about the future demand for GLP-1 drugs. However, analysts believe that weight-loss surgery is becoming safer, faster, more effective, and lower in cost.

On the other hand, according to Bernstein's report, GLP-1 drugs can help more patients achieve a safer BMI index, making them eligible for weight-loss surgery.

"By helping severely obese patients lose weight, GLP-1 drugs not only reduce the risk of these patients undergoing weight-loss surgery but also help them qualify for weight-loss surgery, which they were previously ineligible for due to dangerously high BMI," Hambright and his team said.

Medical technology companies such as Stryker (SYK.US) stated that weight-loss drugs help patients achieve a safer BMI level, and the impact of weight-loss drugs on the number of surgeries is "neutral to slightly positive."

On the other hand, the recent hype about GLP-1 drugs can raise public awareness of obesity as a chronic disease and inform patients of all treatment options, including surgery.

Bernstein concluded, "Ultimately, GLP-1 drugs may become a driving force for the growth of weight-loss surgery in the long term."