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GLP-1 disruption

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whatstheofficerproblem Mentor

whatstheofficerproblem

Posted
Posted
11 minutes ago, John Hjorth said:

 

What makes you think this is important?

 

It is important because that is how these idiots a.k.a sell-side analysts are going to throw a barrage of ratings around downgrading every stock that they think will be adversely affected and upgrading everything that has even the slightest tailwind. And since their ratings have sway on institutional ownership, a lot of stock will become ridiculously expensive while the others reasonably cheap.

 

Also an indicator of what their 'Macro' outlook is since this is kind of a sea change and GLP-1 will cause the ripple. I still do not understand sell-side analysts, they are the only people who maintain a 'buy' rating while simultaneously decreasing their price target when the stock is going down. They do have impact on pricing and we might as well take advantage of it.

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John Hjorth Veteran

John Hjorth

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7 minutes ago, whatstheofficerproblem said:

 

It is important because that is how these idiots a.k.a sell-side analysts are going to throw a barrage of ratings around downgrading every stock that they think will be adversely affected and upgrading everything that has even the slightest tailwind. And since their ratings have sway on institutional ownership, a lot of stock will become ridiculously expensive while the others reasonably cheap.

 

Also an indicator of what their 'Macro' outlook is since this is kind of a sea change and GLP-1 will cause the ripple. I still do not understand sell-side analysts, they are the only people who maintain a 'buy' rating while simultaneously decreasing their price target when the stock is going down. They do have impact on pricing and we might as well take advantage of it.

 

I still don't get it. And I won't. Novo Nordisk A/S CEO Lars Fruergård Jørgensen is totally zipped in his public communication. Ely Lilly doesen't [even] have an approved product [in any country] yet.

 

In short, please get real and please make up your own mind, based on your own work on fundamentals, not this rubbish  and *BS* about the behavior of sell-side analysts, downgrading, tailwinds, adversily affected ownership, combined with statements about a lot of stocks will become ridicously expensive, while the others wll be [reasonably] cheap.

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changegonnacome Grand Master

changegonnacome

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45 minutes ago, whatstheofficerproblem said:

They do have impact on pricing and we might as well take advantage of it.

 

1 hour ago, John Hjorth said:

What makes you think this is important?

 

45 minutes ago, whatstheofficerproblem said:

It is important because that is how these idiots a.k.a sell-side analysts

 

Si Senior

 

One can think of these sell side reports as the consensus...or lets call it the consensus opinion being built.....most of the real money made in markets, the apha, is having a non-consensus view and being proved right......so hope that answers your question @John Hjorth 

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rogermunibond Community Regular

rogermunibond

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The evidence for GLP1RAs and addiction is mixed from previous generations of compounds.  And then safety with AUD patients is another thing.  Many with AUD are already underweight or normal weight so could be dangerous for them to lose more.

 

There's a good commentary in Nature Medicine on it but it might be pay walled.

 

https://doi.org/10.1038/s41591-023-02634-8

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ValueArb Mentor

ValueArb

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On 10/25/2023 at 12:58 PM, changegonnacome said:

 

 

 

Si Senior

 

One can think of these sell side reports as the consensus...or lets call it the consensus opinion being built.....most of the real money made in markets, the apha, is having a non-consensus view and being proved right......so hope that answers your question @John Hjorth 

 

You only want to adopt a non-consensus view if the consensus view is wrong. If the market is generally efficient the consensus is right a lot more than it's wrong. So how do you know when the consensus is wrong? Only when the fundamental value of an investment is clearly and significantly different than its price. To know that you don't have to care what analysts think, or how much their ratings actually affect anything, but you do have to know the fundamental value of the investment, ie it has to lie within your circle of competence. 

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changegonnacome Grand Master

changegonnacome

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Posted (edited)
On 12/6/2023 at 12:26 PM, ValueArb said:

You only want to adopt a non-consensus view if the consensus view is wrong.

 

For sure - broadly you need to have a variant perception which by definition is non-census. Having a different view than that baked in the current price and being proved RIGHT is what matters.

 

Analysts forecasts for revenues, EPS etc. certainly help locate a broad zipcode for expectations around underlying business performance - with the assumption that those expectations are in the price. There are two components to stock price returns......underlying business performance (dollars & cents) crudely EPS but then there is perceived business quality which factors into the multiples paid by the market for that EPS.....so called exit multiple.

 

The way to make money is to have differing viewpoint on the underlying business performance and/or business quality - returns come from both and I've made money in both....separately and at the same time.

 

For example, as a case study, one of my investment Hostelworld has both working for it. Their social strategy is driving underlying business performance - revenues, FCF, EPS - relative to the past and relative most importantly to the consensus. This alone will drive the stock up. So thats one box checked - underlying business performance.

 

However, given the terminal value fears around the company when Booking.com entered the category questions were raised about the quality of those earnings - multiples came down to reflect concerns on the moat. Again in this regard a change in the perceived business quality - via social strategy re-moating the business - will likely once proved out a bit more with time - see the multiple paid on EPS re-rate higher as the consensus view on the business quality (i.e. durability of earnings) changes as the market gets more comfortable that the social strategy represents barrier to entry for other OTA's such as booking to steal market share.

 

I've crudely talked about this in the past as the kind of surprise factor - the underlying business performance surprises vs. concensus or a company's durability or moat surprises vs. concensus......you can have negative surprises too of course and we've all had them!

 

 

Edited by changegonnacome
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whatstheofficerproblem Mentor

whatstheofficerproblem

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Posted (edited)

We need to talk about the bear case here. We all know that Ozempic is expensive, what is the probability that Ozempic loses market share to Lizzo? Overall, a good amount of pricing pressure has built up, good for the consumers, but bad for the pharmas.

 

https://www.investors.com/news/technology/eli-lilly-novo-nordisk-fall-roche-weight-loss-drug/

 

https://www.citizen.org/news/public-citizen-urges-hhs-to-unlock-generic-competition-for-popular-weight-loss-drugs-ozempic-and-wegovy/   -> Bigger risk than competitors.

 

https://www.axios.com/2024/07/25/weight-loss-drugs-viking-therapeutics-roche-glp-1

Edited by whatstheofficerproblem
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Red Lion Mentor

Red Lion

Posted
Posted
6 hours ago, whatstheofficerproblem said:

We need to talk about the bear case here. We all know that Ozempic is expensive, what is the probability that Ozempic loses market share to Lizzo? Overall, a good amount of pricing pressure has built up, good for the consumers, but bad for the pharmas.

 

https://www.investors.com/news/technology/eli-lilly-novo-nordisk-fall-roche-weight-loss-drug/

 

https://www.citizen.org/news/public-citizen-urges-hhs-to-unlock-generic-competition-for-popular-weight-loss-drugs-ozempic-and-wegovy/   -> Bigger risk than competitors.

 

https://www.axios.com/2024/07/25/weight-loss-drugs-viking-therapeutics-roche-glp-1

 

 

Mounjaro is already more effective than Ozempic, but also quite expensive. These drugs are evolving rapidly into more effective (and oral) versions. But it's still mostly NVO and LLY holding most of this IP I believe. and who knows who has the upper hand.  I've been a believer in this story the whole time waiting for a pullback and missing some great multi baggers. NVO/LLY are certainly sins of omission in my investing career that I regret at least once a week. 

 

I've noticed that LLY seems to have sorted out its supply chain issues on Mounjaro, which means I'm sure they're minting cash. I believe the same is true about NVO but I don't follow it as closely. 

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nsx5200 Collaborator

nsx5200

Posted
Posted
20 hours ago, Spekulatius said:

Generics won’t happen for a while, but cheaper competitors eventually will emerge. the market is just too big for a late entrant not to try to get share through pricing.

https://www.wsj.com/health/pharma/rivals-emerge-to-ozempic-and-zepboundbut-with-a-lag-60b555bb?mod=WTRN_pos5&cx_testId=3&cx_testVariant=cx_160&cx_artPos=4

"There are dozens of promising biotech companies developing weight-loss drugs. Among the larger drug companies, Amgen AMGN 0.74%increase; green up pointing triangle and Roche stand out at the moment, and Wall Street is giving them some credit for it."

 

That didn't take long...

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John Hjorth Veteran

John Hjorth

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Today, I stumbled on X over the thread below. I would appreciate comments about the content and information from CoBF members with knowledge about the matter at hand in the thread. [I am personally a bit skeptical about the source and the author [selfpromoting ghostwriter, as I understand the account info.].]

 

 

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nsx5200 Collaborator

nsx5200

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There are many contributors leading to the obesity epidemic.  The farming policy that favors big farm, big sugar, big beef is just a part of it.  On the guideline side, there's also the USDA, which has a hand in updating the guideline, and influenced by https://en.wikipedia.org/wiki/Regulatory_capture from big farm.  The conflict of interest is obvious when you look at the history to add sugar to the US nutritional label.  From Nutrition Facts Label "Some of these changes sparked a major debate between the food industry and public health agencies. The proposal to indicate sugar added during food production, particular, was brought forward by the FDA as a measure to counter the increase in per capita sugar consumption in the US, which over the last decades exceeded the limits recommended by scientific institutions and governmental agencies."

 

When the body creating the nutritional label fights scientific data, you know they've been bought off.  The nutritional guidelines propagate down to the school lunches, official recommendations taught in school, and in medical education.  Ultimately, it goes towards increasing the consumption of processed foods just so the food companies can make a buck.  The gist of it is that if most people ate lightly processed foods, most of the food companies will go out of business since their 'value-add' is in the processing.  So they've been steering the regulatory bodies towards stuff they can process, most of which are carbs (think snacks, ready-to-eat stuff, etc.).  Walk into a typical American grocery store, and you'll find that most of the floor space that sells food is processed carb/sugar related.

 

The TLDR version is that there are certainly some events and people that have been outed as major contributors in the epidemic, but even without them, the market forces for trying to 'add value' to food would've lead to similar situation that we're in right now.  So IMHO, it's a bit unfair to point our fingers at them, when we should be focused on fixing the problem (especially the conflict of interest parts in the systems).

 

These topics can go really deep, and would like to see if a tighter integrated health system like the NHS in UK can have a better outcome.

 

That's just my humble observations, others may (and most likely will) have a different viewpoint.

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Fly Enthusiast

Fly

Posted
Posted (edited)
8 hours ago, nsx5200 said:

When the body creating the nutritional label fights scientific data, you know they've been bought off. 

 

Shortly after Obama started his term there was a campaign launched by Michelle Obama that was focused on eating healthy and avoiding sugar. It lasted a few days and then there was quickly a pivot towards "Let's Move" which turned into a focus on exercise. I don't think there is any appetite (ha!) to truly address food concerns from any level of regulator.

Edited by Fly
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