What’s going on here?

Novo Nordisk's popular Ozempic drug has been linked to a reduced Alzheimer's risk, suggesting that the blockbuster drug might have more than just physical benefits.

What does this mean?

A study of over a million US patient records found that semaglutide, Ozempic's active ingredient, offered a 40% to 70% reduced risk of Alzheimer’s versus older anti-diabetic drugs. The research, published Thursday, suggests that semaglutide's effects on nerve cells, inflammation, and vascular health could be a key to shrinking Alzheimer's risk. If clinical trials confirm it, the drugs could become not just a powerhouse in managing diabetes and obesity, but also a safeguard against dementia. Previous studies have also hinted at semaglutides’ off-script benefits: a potential capacity to curb opioid overdoses and substance abuse disorders.

Why should I care?

For markets: A $100 billion prize.

It’s little surprise then, that investors are feeling optimistic about the long-term health of Novo Nordisk’s bottom line. Its hugely popular weight-loss drugs are already in high demand in the US, where they’re not exactly sold for cheap – patients pay over $1,000 per month. And with seven million Americans currently living with Alzheimer’s, forecasters expect an expanding combined market for the drugs – potentially worth over $100 billion. Standing to benefit from this the most are the big fishes of the semaglutide market – Eli Lilly and Novo Nordisk.

The bigger picture: Competition heats up.

Just this week, Novo Nordisk asked the Food and Drug Administration to prevent compounding pharmacies from making unapproved, cheaper versions of its products – making it clear that the Denmark-based pharma giant is feeling some pressure. What’s more, Roche, which has plans to launch its own weight-loss drug, is asking authorities to block Novo’s takeover of drug manufacturer Catalent. And Novo needs that takeover to happen, if it hopes to boost production of its in-demand medicines.