The Bernese municipality of Burgdorf, also known as the "Gateway to the Emmental", has a population of just 17,000. Not only does cultural diversity play an important role in this tranquil town, Burgdorf also occupies a box seat when it comes to healthcare. The brothers Willy and Peter Michel founded Ypsomed there exactly 40 years ago. With success: the company is now the third-largest employer in the medical technology sector in Switzerland. Ypsomed is currently in the global spotlight, particularly with its injection systems for administering obesity therapies. It was only in the fall of last year that the family-owned company was able to agree a long-term supply contract with Novo Nordisk, which currently shares this market with Eli Lilly. Stock market investors are rewarding the development: the Ypsomed share has risen by an impressive 60% over the past year.
What "AI" is in the technology world, "GLP-1" is in the pharmaceutical industry. The new "wonder drug" Wegovy from Danish healthcare giant Novo Nordisk has been approved in the USA since 2021. The drug, originally known for diabetes, has since also been administered as a weight loss injection. In 2022, a competitor drug, Mounjaro from Eli Lilly, came onto the market. Since then, the duo has hardly been able to save themselves from orders. A development that plays into Ypsomed's hands. This can also be seen in the balance sheet: In the 2023/24 financial year (March 31), the "Delivery Systems" segment, which includes the autoinjectors, grew by a quarter to CHF 385.2 million. This segment now accounts for 70% of revenue.
CEO Simon Michel, who has been at the helm of the Group for 10 years and is the second generation to do so, intends to continue to focus on this division in the future. The reason is relatively simple: it is a B2B business that, in his words, promises "high margins, little competition and enormous growth potential". But GLP-1 specialists are not the only ones on Ypsomed's customer list; the company works with a total of 27 of the top 30 pharmaceutical companies.
Ypsomed's second pillar, the "Diabetes Care" division, is currently being restructured. Here, the company supplies end users with insulin pumps, which Michel would also like to focus on in the future. In order to shape the division into a global provider in diabetes care, peripheral areas are being sold off. At the beginning of August, the pen needle and blood glucose meter business was sold to the Italian company Medical Technology and Devices. The streamlining of the Diabetes Care division means that the focus is now on the innovative mylife Loop insulin pump solution. The CamAPS FX algorithm used by the pump was recently given the green light by the US Food and Drug Administration (FDA). In addition, the FDA is reviewing mylife YpsoPump as an interoperable insulin pump. "This paves the way for mylife Loop to enter the US market," says Ypsomed.
Both diabetes and weight loss are growth markets. The International Diabetes Federation estimates that by 2045, one in eight adults, i.e. around 783 million, will be living with diabetes, which corresponds to an increase of 46%. Obesity is also on the rise. UBS therefore estimates that around 40 million people will be taking GLP-1 by 2029, 44% of them in the USA. This corresponds to sales of USD 126 billion and an average annual increase in sales of 30%. The number of drugs approved on the market is also likely to increase. According to experts from Morningstar and Pitchbook, 16 new weight loss drugs are expected to be launched on the market by 2029. And the areas of application may also expand. Novo Nordisk, for example, is currently hoping for an extension of the EU approval for its drug Wegovy, which is said to reduce the risk of heart failure in obese patients.
The operational outlook for Ypsomed is therefore rosy. This is also reflected in the profit estimates. The analyst consensus assumes that earnings per share will increase by an average of 39.1% between 2025 and 2027. In view of this strong growth, the price/earnings ratio (P/E ratio) would also fall significantly from 72 in 2024 to 26.9. Nevertheless, partial protection cannot hurt an investment in the medical technology share - and certainly not if the earnings potential is disproportionately high at the same time. A new bonus certificate, which combines the chance of outperformance with a protective mechanism, has these characteristics. The product ultimately aims to generate an attractive profit even if prices rise moderately.
The certificate works as follows: Rising Ypsomed share prices leverage the security from the bonus level at 100% of the starting price at a rate of 150%. This "turbo" works up to the cap at 135% of the starting level. The maximum redemption amount is therefore 152.5% of the nominal value. If the MedTech share does not succeed in continuing its climb and is quoted below the starting level at the final fixing, the investment does not necessarily end with a loss. This is ensured by the barrier, which is placed at 65% of the starting value. Losses may only occur if the risk buffer is insufficient during the three-year term.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.