GLP-1 Picks and Shovels
Eric Valente@ericvalente
The idea
I believe GLP-1 drugs keep spreading for years, so I'd rather own the companies that supply everyone making and distributing them than bet on any single drugmaker. The basket spans manufacturing tools, wholesalers, pens and packaging, quality testing, and clinical trial firms, weighted toward the drug-making and distribution layers since pills are starting to replace injections. I keep some cash on hand and avoid concentrating in one name, planning to hold this for years unless the underlying shift toward GLP-1 adoption stalls out.
What will be bought
- GLP-1 makers of all kinds, brand or generic, buy the same equipment, ingredients and manufacturing services to produce these drugs at scale. · Thermo Fisher ScientificIt supplies the equipment, ingredients and contract manufacturing services that all GLP-1 makers rely on, so it gets paid regardless of which company wins the market., DanaherIt makes the bioprocess equipment, filters and single-use systems that drug manufacturing plants operate to produce GLP-1s at scale., RepligenIt specializes in purification systems that clean and concentrate drugs during manufacturing, a step every GLP-1 maker must perform., Dr. Reddy's LaboratoriesIt manufactures generic semaglutide, bringing GLP-1 treatment to far more patients once affordable copies reach the market., AvantorIt supplies the chemicals, lab materials and single-use components consumed daily in drug manufacturing plants making GLP-1s.26%
- Nearly every GLP-1 prescription filled in the US passes through one of three major drug wholesalers on its way to patients. · McKessonAs the largest US drug wholesaler, it handles the majority of GLP-1 prescriptions moving from makers to pharmacies and patients., CencoraIt distributes drugs to pharmacies and clinics with a strong specialty pharmacy business that benefits from high-priced GLP-1 volume., Cardinal HealthIt supplies drugs to pharmacies across the US, so it gains volume as more people fill GLP-1 prescriptions in the market.22%
- Injections remain the dominant form today, and every dose requires a pen, vial or sealed container to reach the patient. · West Pharmaceutical ServicesIt makes the stoppers, seals and rubber components that go into injectable GLP-1 pens and vials., Stevanato GroupIt manufactures the glass cartridges and vials that hold injectable GLP-1 doses, including for generic versions., Becton, DickinsonIt makes syringes, needles and pen components used to deliver injectable GLP-1 drugs to patients., AptarGroupIt makes drug delivery systems and packaging solutions used for GLP-1s whether they are delivered as injections or oral pills.16%
- Each batch of peptide or finished pill must pass testing before it ships, so more batches and more makers mean more demand for testing equipment and supplies. · WatersIt makes the analytical instruments used to verify that peptides like semaglutide and tirzepatide meet purity and manufacturing standards before release., Agilent TechnologiesIt sells lab testing instruments and consumable supplies used to verify that GLP-1 drugs meet quality and purity standards., Mettler-ToledoIt makes precision scales and laboratory equipment that drug manufacturers depend on for measuring ingredients and quality control.15%
- Dozens of companies are racing to develop and test new obesity drugs, and they hire specialized firms to design and run those clinical trials. · MedpaceIt runs clinical trials for drug makers and holds a significant share of obesity and metabolic studies that bring new GLP-1 drugs and indications to market., ICONIt runs large clinical trials globally, providing the infrastructure needed to test new GLP-1 drugs, pill forms and expanded uses., IQVIAIt runs clinical trials for drug makers and provides prescription data analytics, earning from both GLP-1 development and commercial sales tracking.11%
- Cash10%