As new weight loss medications garnered buzz last year, analysts’ forecasts signaled these drugs would be blockbusters, with some of the highest estimates calling for peak sales of at least $100 billion. In recent days, the expectations are moving higher still. The initial projections were made before Wall Street saw the results of Novo Nordisk’s Select trial in August. The early readout from that study shows semaglutide, which is sold under the brand names Ozempic and Wegovy, could reduce the risk of a stroke or heart attack by 20%. The full data from the trial will be shared in mid-November at the American Heart Association conference. It was also before more people began to take these drugs and report on social media about things they were observing. Patients detailed how much weight they were losing or mentioned that their cravings for food and alcohol disappeared. Some observed that after losing weight they no longer needed to use CPAP machines to treat their obstructive sleep apnea. Meanwhile, the companies continued to do scientific research on how these drugs could be used to treat a range of conditions, including liver and kidney disease. Back to the models These developments have fanned the excitement again . In recent days, several analysts have gone back to their models and crunched the numbers again to determine if these projections are too rosy or if they underestimate the category’s potential. Guggenheim analyst Seamus Fernandez published a note Tuesday in which he explained how the total addressable market for these so-called incretin drugs could balloon to $150 billion to $200 billion. “We reiterate our BUY ratings on both LLY and NOVO.B-CSE due to the strength of our conviction behind the companies’ respective GLP-1 franchises and our growing view that GLP-1 based incretins could be the most prescribed class of pharmaceuticals ever by or before 2031,” Fernandez said. He lifted his Lilly price target to $620 from $474, suggesting nearly 8% upside from where shares closed Friday. LLY YTD mountain Eli Lilly shares have soared year to date. Separately, Morgan Stanley analyst Terence Flynn on Thursday said his latest analysis suggests the bull case of worldwide sales for Eli Lilly’s Mounjaro of $65 billion by 2030 is achievable. Previously, Flynn’s base case scenario called for sales of $44 billion in that timeframe. Mounjaro, which is also known as tirzepatide, is expected to receive approval from the Food and Drug Administration by the end of this year to treat obesity. The drug is already on the market as a type 2 diabetes treatment. NVO YTD mountain Novo Nordisk recently became Europe’s most valuable company. Even before this week’s rosy forecasts, shares of Novo Nordisk and Eli Lilly have been climbing. U.S. traded shares of Novo Nordisk, which recently became Europe’s most valuable company, are up nearly 41% year to date. Lilly has advanced 57% in 2023. Both stocks are trading above their average price targets, according to FactSet. ‘Buy the fear’ The success of these companies have had has been bad news for a host of medical device stocks . Dexcom and Insulet , for example, make continuous glucose monitors and insulin pumps. Dexcom shares are off by nearly 15% in 2023, while Insulet has tumbled 42%. On Monday, Canaccord Genuity analyst William Plovanic urged clients to “buy the fear.” “Our net takeaway: near-term impact is little to none and long-term implications are not easily determined given lack of data. Therefore, we would buy on the pullback, especially diabetes names DXCM and PODD,” Plovanic wrote. Other analysts have echoed these sentiments, but medical device stocks have continued to fall. DXCM 3M mountain Dexcom shares have struggled in recent weeks. Plovanic’s view is based on many factors, but he mentioned that the costs of GLP-1 medications are high and in the real world — not clinical trials — there is a large drop-off rate for people taking the drugs. “Interestingly, an analysis by pharmacy benefits manager Prime Therapeutics of obese patients (not with T2D) found that only 32% of those observed who started taking GLP-1 RAs (half Ozempic/Wegovy, the rest a mix of Saxenda or Rybelsus) were still taking the drugs 12 months later despite all participants having insurance coverage,” he said. It’s not known what prompted these people to stop treatment. However, the trend likely means that a portion regained some of the weight they lost while on the therapy. In a cardiovascular trial, two-thirds of participants’ weight was regained 12 months after they stopped taking the drugs, Plovanic said. “So in summary, it is expensive, a majority of the patients stopped taking the drug at one year and if you stop, the benefits are reversed quickly in a majority of the patients,” he said. All of this would mean that there is still business to be had for companies such as Dexcom and Insulet, according to Plovanic. Hard to ignore Still, it is early days, and the overlaps between obesity and overweight and conditions like heart disease, sleep apnea and other illnesses are hard to ignore. Together, these diseases represent an enormous market, and only a portion of it would need to be treated in order for a company to see large sales gains. GLP-1 medications are already gaining market share. Data provider Iqvia BrandImpact shows that about 30% of brand new diabetes prescriptions are for GLP-1 medications. By comparison, about 23% of all diabetes prescriptions are for drugs in this category. To reach Guggenheim’s lofty projection, Fernandez assumed that more than $50 billion in GLP-1 sales will come from patients with diabetes, as treatment with incretin medications becomes the standard of care. GLP-1 stands for glucagon-like peptide-1 receptor agonist. The drug mimics the incretin hormone that is released in the gut. It helps stimulate insulin production, slows how quickly food leaves the stomach and creates a feeling of satiety in the brain. (Mounjaro has a second incretin hormone known as gastric inhibitory polypeptide, or GIP, that has similar effects.) These attributes have helped patients with type 2 diabetes regulate blood sugar levels and have helped people shed pounds. Doctors also have observed falling cholesterol counts and blood pressure levels on occasion, though it’s unclear if this is a function of the medicine or weight loss. It also appears to reduce inflammation. Fernandez sees a total addressable market of $140 billion to support patients with obesity. He expects there is a potential for GLP-1 drugs to become as common and widely used, much like statins are used to lower cholesterol. “While it may seem outlandish to put obesity treatments on par with statins, obesity is a visible symptomatic condition that could ultimately result in higher persistence and adherence rates compared to oral diabetic agents that do not impact weight or silent disease such as [hypertension] and dyslipidemia,” Fernandez wrote in a research note. Dyslipidemia, or an imbalance of lipids such as cholesterol, can led to severe cardiovascular issues. The Centers for Disease Control and Prevention estimates that 60 million people have this condition. It estimates 120 million people have hypertension, or high blood pressure, and 140 million are obese or overweight. Morgan Stanley’s Flynn estimates a 30% share of the diabetes market would generate $109 billion on a worldwide basis for GLP-1 drugs. Layer in a 15% to 30% share of the obesity market and that equates to worldwide sales of $97.4 billion to $194.8 billion. Flynn said he expects Novo Nordisk’s Select-Life trial will be helpful in understanding how different diseases are linked to one another and what role GLP-1 medicines can play in their treatment. The study is a 10-year observational follow-up, with data collected twice a year from patients, he said. Information the company is seeking includes how the drugs prevent type 2 diabetes, knee replacement surgery, CPAP device usage and cancer, Morgan Stanley said, adding that results will be shared over the course of 2023 to 2025. Research is ongoing for the use of the medications to treat a long list of ailments, including two phase 3 trials in Alzheimer’s disease. Data from those two studies are expected in 2025. The analysts also warned that in order to meet the demand, both Novo Nordisk and Eli Lilly will need to increase their manufacturing capacity. Guggenheim’s estimates also assume that oral GLP-1 drugs that are currently in development are able to come to market a few years from now. -CNBC’s Michael Bloom contributed reporting.