Finally, we take a short break from the A.I. mania to look at something else… this is the start of the pitch from Stansberry for Dr. David Eifrig’s Prosperity Investor(special deal is $2,500 for two years), with the ad introduced by Thomas Carroll, one of the analysts for that letter (John Engel is the other, in case you’re curious):
“A newly patented breakthrough is about to attract billions of customers… treat more than 70 diseases… and see 842% market growth
– FDA Approval is Likely Days Away –
“Here’s Exactly Where to Move Your Money Now….”
We covered retirement-pitch-who-are-the-winners-of-his-health-care-singularity/">Prosperity Investor when it was launched last year with Eifrig’s Seven Forever Stocks (plus three 1,000% winner speculations), it’s generally a “buy forever stocks, especially in healthcare” advisory.
And those same “Forever” stocks and “1,000%+ gainers” are still teased in this ad as bonus special reports, incidentally, so if you’re interested in those, here’s what I shared in the Quick Take for our Irregulars back then:
Dr. David Eifrig is launching a new service focused on investments in the healthcare sector, which he sees as being nicely valued right now, with potential for huge long-term gains. The bait for charter members is largely his pitch of seven “forever” stocks, which definitely includes Gilead (GILD), Omega (OHI) and UnitedHealth (UNH), and I would throw in guesses Pfizer (PFE), Medtronic (MDT), Bristol-Myers Squibb (BMY) and CVS Health (CVS) (with other possible contenders being Cardinal Health (CAH), PerkinElmer (PKI) and Ventas (VTR)). Eifrig also teases three much more speculative “1,000% potential” stocks and those are DermTech (DMTK) with its at-home melanoma test, Butterfly Network (BFLY) with its handheld AI-powered sonogram that we’ve covered before (teased by Oxford Club in April), and Immatics (IMTX), an early stage oncology biotech with a big BMY partnership deal. I don’t generally buy pharma stocks, I use funds for that (mostly just because I know the investors I’d be buying those stocks from understand the science and healthcare marketplace much better than I do), but all the definite and possible “forever” stocks look pretty reasonable to me… among the more speculative ones, I’m most attracted to the hit or miss Immatics, which is super early but well-funded.
If we include both the certain picks from that initial pitch and the guesses, then here’s the chart for how those stocks have done since that ad launched back in November — as you can see, only one of the stocks, the melanoma testmaker DermTech, has beaten the market over the past seven months. So if you’re looking for those kinds of ideas, well, you haven’t missed anything yet. Big healthcare stocks, in general, have trailed the market of late.
But that’s just the background here… what’s the big pitch today? More from the ad:
“Our company has a long history of spotting groundbreaking medical advancements before they receive FDA approval.
“Our firm has shown some readers how to make double- and triple-digit gains within months of stories publishing.
“But today’s story is far bigger than anything we ever reported on in the past.
“It’s the ‘great white whale’ of FDA approval stories….
“And there’s ONE company standing at the helm of all this.
“A company that’s perfectly positioned to be among the prime benefactors of this astounding growth.
“That’s because they have a breakthrough drug that could treat a disease currently impacting 125 million Americans…”
OK, so even before they come out with the details, we know that’s some kind of obesity treatment — nothing impacts nearly as many people as obesity, and the search for the best weight loss drug is probably second only to the search for an Alzheimer’s cure when it comes to tantalizing investors with extraordinary potential gains. t
What else do we hear about this particular drug?
“… the sales of this drug could become far bigger than all the best-selling drugs just mentioned… combined….
“… a major FDA announcement (coming as soon as June 26) could help you amass incredible wealth if you act now.
“Fortune reported this breakthrough is “expected to be one of the best-selling” healthcare products of all time… “with sales over $50 billion a year.”
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just click here...“That’s more than double the annual sales of best-selling drugs in history. But as I’ll show you, even those projections are gross underestimates for what’s coming.”
That’s a bonkers number, to be sure — the top selling drug in history was Lipitor for a long time, and it took more than 15 years for that drug to reach $150 billion in sales… and the drug that will likely take over very soon as the top all-time seller, Humira, topped out at about $20 billion a year not long ago. That projection is a lot more than 2X what the best-selling drug in history has ever sold in a year.
Which doesn’t mean it’s impossible, of course, you can easily make the math work to be way above that number if everyone who wants to lose weight is able to buy the drug… but it does mean there would probably have to be a pretty meaningful shift by insurance companies to cover the prescription, assuming it ends up being at least as expensive as the popular Wegovy weight loss drug that’s being fought over by celebrities now (many insurers don’t cover it, and the injections cost about $1,000/month).
More from the pitch:
“All the biggest moves are still ahead… and may begin this summer.
“Again, possibly as early as June 26.
“Once the FDA approves this drug, people will learn that it’s THE most effective in the world at causing weight loss….
“Analysts at Morgan Stanley, for example, say this drug could help launch a new medical market worth $54 billion by the end of the decade.
“But common sense would tell you that number is shockingly low.
“Really think about it: If you’re able to manage your weight… you’re also going to stave off and alleviate a lot of other problems for yourself.
“Like preventing insulin resistance… and heart issues.
“Obesity increases your risk of developing coronary artery disease by 81% – heck, obesity even increases your chances of developing depression by 55%!”
Whenever we cover obesity and weight-loss drugs, there are always a certain number of people who will say, “but wait, what about discipline? Why not just exercise and eat less? My method works better than these drugs!” So yes, those are certainly drug-free options for many people, but I think we can pretty clearly say that they don’t work for most Americans. Society shames the heck out of people for being overweight, people have been trying all kinds of diets and treatments for years, and still the tide has never turned for obesity levels in the US. Whether it’s because of the environment we live in, or the addictive quality of modern processed food, or because of a deficient national character in some other way, we clearly haven’t come up with a solution that actually works for most people. I bet that if there were a pill everyone could afford today to help them lose 20% of their weight and take it off, more than 1/3 of people would take it even if it had unpleasant side effects. Without serious side effects, it would probably be 2/3. (Those are big “if’s,” of course, both the side effects and the cost).
More from the ad:
“It would take three to ten hours on the treadmill to burn off the calories from one dinner out at a restaurant.
“The fact is, practically no one has that much time to dedicate to an exercise routine.
“That means cutting calories is the ONLY way to end this epidemic…
“And it’s nearly impossible to cut calories… unless you can curb the mind-bending urge to eat the most calorie-heavy, addictive foods.
“Scientists have found cravings for high-fat, high-calorie foods are similar to drug addictions, like cocaine… and that those cravings are programmed into our very DNA.
“As of right now, there’s only ONE drug that’s proven beyond a shadow of a doubt to be the best at reducing appetite AND initiating weight loss.”
And about the market size:
“… if just 10% of the people suffering from obesity in the U.S. go on this medication for just one year, then we’re looking at potentially $163 billion in annual sales….
“There are 2.6 billion people who are obese or overweight around the world. If just 10% take this drug for only ONE month, that’s $286 billion in sales.
“$286 billion… in ONE month.
“I know, that number seems obscenely big.
“Almost too big to be true – but these sales numbers aren’t just possible… they’re likely only the start.
“This drug is gearing up to be the highest-grossing medical product in history.”
And the argument in the pitch is mostly just that this drug is obviously superior, and therefore will suck up market share…
“The most effective drugs WILL ALWAYS win market share and sales.
“You can pick the winners almost every time – if you understand what prescriptions doctors will write…..
“in the world of drug science, the better drug wins sales.
“And right now, while the weight loss drug Wegovy may be a household name, and it may maintain a portion of market share in this new market…
“There’s a very good chance this new and more effective weight loss drug will likely win the majority of market share once it’s approved.
“Because a weight loss drug that is TWICE as powerful and with fewer side effects is GOING to win over doctors… win prescriptions… and potentially see incredible sales.”
The ad even includes some quotes from experts:
“And we know how doctors feel about the brand-new weight loss drug that’s proving far superior (and safer) at losing weight.
“They’ve gone on record to say so:
Dr. Louis J. Aronne – the director of the Center for Weight Management at Weill-Cornell Medicine – said the weight loss seen from this drug was ‘in the range of bariatric surgery.’
Dr. Lee M. Kaplan – the director of the Obesity, Metabolism, and Nutrition Institute at Massachusetts General Hospital – called the results of this drug ‘amazing’ and the start of a ‘new era of obesity treatment.’
And Dr. Ania M. Jastreboff, director of weight management & obesity prevention at the Yale School of Medicine, said this drug reached weight loss levels ‘not previously seen’ in any past trial.”
The urgency of the “June 26” deadline is just that Eifrig et al expect the drug to be approved around then…
“… while it’s impossible to know exactly how the FDA will rule until their official announcement…
“We know two very important things:
“The FDA already approved this drug for one disease, and it passed with flying colors – so, we know it’s safe.
“The FDA granted this drug a priority review and a “fast-track designation,” which means regulators saw the potential to quickly help a significant number of patients.
“And that’s ALSO why this approval is extremely likely to happen soon….
“No one but FDA officials know the exact day drug results will be released.
“But we do know the FDA’s self-imposed deadline on that ‘fast-track designation’ is coming up fast – they’ll decide the fate of this drug probably around June 26.
“We know this because we counted 60 days out from the filing date.
“That’s when the FDA is supposed to give its ruling by.
“That announcement date is quickly approaching… and your chance to get in on this one-of-a-kind weight loss drug (before the start of its record-breaking sales) is slowly slipping away.”
So what’s the story?
This is, as you might have already guessed by now, the drug tirzepatide, which is being developed by Eli Lilly (LLY) for weight loss. The same drug was approved last year for adults with Type 2 Diabetes, under the name Mounjaro, and it is already being prescribed off-label for weight loss, thanks to the strong results in clinical trials.
And Eli Lilly has been the story of stories among big pharma stocks for over a year now, thanks both to the excitement over Mounjaro and the successful late-stage trials from their Donanemab, which is a promising treatment for Alzheimer’s Disease. It’s a profitable company, and has other successful products, but those two not-really-approved-yet drugs have turned Lilly into the largest pharmaceutical company in the world, having leapfrogged over Johnson & Johnson (JNJ) recently.
So investors have been eating up this story for a couple years now, following the progress of these drugs… does the $420 billion market cap already reflect the profits that Mounjaro (and maybe Donanemab) might bring? That’s a judgement call, of course, nobody can really know because nobody knows how insurers will handle successful weight loss drugs over the long term (or Alzheimer’s Disease drugs, for that matter), but it’s certainly possible that it will work out, even with the stock already at 50X the estimated $8.70 they’ll have in earnings per share this year. Analysts see the revenue going from $29 billion last year to $31 billion this year, but then rocketing more than 20% higher in 2024 and 2025 (reaching $44 billion in 2025). That’s almost as strong as the growth analysts estimate for NVIDIA (NVDA), the current market darling in artificial intelligence (which also trades at 50X forward earnings estimates, incidentally).
The ad does also note that although the stock has gone up sharply, they think it will go up a lot more:
“Q: Has this stock moved on any of the early news, like the announcement that its weight loss drug was awarded a fast-track review by the FDA?
“Yes, this stock has moved a bit in the near term. But given the market that this drug will revolutionize, we see lots more gains coming in the future. It’s likely to go far higher in the next year, two years, five years, even 10-years, relative to what we’ve seen in just the last few months.
“So, certainly, we’ve seen a little move in the stock price. But again, I think we’re going to see this stock march much, much higher in the coming years.”
The big attention-getters have been the early Phase 3 data releases from the SURMOUNT trials of Mounjaro, with the patients at higher doses having a 86% chance of losing more than 5% of their body weight, and a 52% chance of losing more than 15% of their body weight, with fairly widespread side effects (20% or so experienced diarrhea and nausea). They’ll continue to have more data releases, there’s one cohort that will be done in June, but there are also ongoing much larger trials that will run for several years, presumably to continue to monitory safety and efficacy and expand the potential user base, after the expected approval of the drug this year — and they’ve also registered a head-to-head clinical trial to test Mounjaroy against Wegovy, though presumably results from that won’t be available until at least next year. There’s a good rundown of all the studies in Lilly’s first quarter investor presentation, if you’d like more of the story.
Tirzepatide/Mounjaro did receive Fast Track designation from the FDA for obesity, and they announced in late April that they planned to “complete rolling submission to the FDA in the coming weeks,” following the completion of the SURMOUNT-2 trial. The general guideline for Fast Track approvals is indeed 60 days, but I don’t think Lilly has officially announced that they’ve finished the rolling submission — all the company has said about the approval timeline is that they expect approval “as soon as later this year.” So I guess June 26 might technically be possible, if they had in fact officially submitted for their Fast Track approval on April 27, when they released the last chunk of data and issued that press release, but I would guess that approval is still at least 60 days away, since I assume they’ll offer up some kind of press release when the rolling submission has been completed.
I’ve seen no indication from anyone that the FDA might not approve tirzepatide for obesity, though I guess anything is possible. Lilly has said that they’re already ramping up their production capacity for the drug, with some large capital investments in manufacturing, though they are also likely to have some other new drug releases this year, too. That consensus about the likelihood of approval for Mounjaro is clearly “priced in” to the stock, though it’s not priced in as a “$50+ billion a year” profit engine, as Eifrig teases, so there’s at least some room for investor optimism still, even at what currently looks like a very high valuation. The indications are that Mounjaro is likely to be a substantially more effective drug than Wegovy, and it’s also true that Wegovy’s maker, Novo Nordisk, has roughly doubled in value since that Wegovy was approved for obesity two years ago… but I should note, to provide a big of caution, that Novo Nordisk at the time was trading at about 28X trailing earnings, a pretty far cry from LLY’s current valuation of 70X earnings (they’re very different companies, with different drivers and different growth, with LLY having high-profile drugs that have given it a richer valuation for all of that time, but the difference has gotten more extreme in the past few months as Mounjaro and Donanemab have generated headlines for Lilly, and juiced up investor excitement).
So… is that a fit for your portfolio? Like the idea of a very large, high-growth pharma story that might slip into the top ten of the S&P 500 if all goes well? Do let us know with a comment below.
Disclosure: of the companies mentioned above, I own call options on Pfizer. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.
The “ultimate” weight loss drug for the 157th time in the last 50 years. None of these drugs ever work otherwise there would be no need to invent new ones every few years. It’s like dieting…diets are a fad and there is always something new to replace what has seldom worked in the past. Get rich on improving your health and staying out of the greedy medical system. You’ll live happier and healthier and save hundreds of thousands of dollars over your lifetime.
Good news, they do work. I have been taking Semaglutide for a year and have gone from 195 to 173 pounds. By myself, I dropped 10 pounds but could not break below 195, no matter what I tried (and it was a miserable experience!) I no longer crave foods that used to be a major source of temptation. Now I resist the aisles of the candy/chip/fried foods and baked goods, without craving or feeling deprived. Semaglutide reduces the quantity of food intake required to produce a feeling of satiety (satisfaction). the feeling also lasts much longer. Periodic constipation, which is improving over time, is the only side effect I have experienced. Also high blood (155/85) pressure is way down (130/70), blood glucose (9.0 to 5.0) and cholesterol are almost back to normal.
If obesity is killing you, try one of these new weight loss drugs, they can’t be worse than side-effects of being overweight.
Glad to hear it worked so well for you… did you have any trouble getting insurance to cover it?
None at all.
Already well priced into the high pe market price……pure hype, underplays side effects ( for 20% of users), overestimates market impact. disappointing to see the Doc slide into the sewer on this one……
See reply to Tom above. Happy to let you know that Doc know whereof he speaks.
stock selling off today right after the tease hit the wire….Lilly charged with RICO crimes in federal court class action…….so much for ethical conduct….if you believe the hype, perhaps a buy the dip situation….
Lilly shares selloff today despite rhe hype…. charged with RICO violations….nice ethics…..but the dip? hardly……
I don’t know if that lawsuit will end up meaning anything. It’s a class-action suit over Actos (an older diabetes drug) that has been going on for quite some time. They’ve also been targeted with class action suits over insulin pricing, along with some others (like Sanofi and Novo).
The stock hasn’t had any particularly huge moves up or down in the past month, and I wouldn’t expect the teaser ad to have any impact at all — it’s a $420 billion company, one of the largest and most liquid in the world, so a little extra attention is extremely unlikely to move the stock.
Surely the two forever products are appetite suppressant and hair regrowth
Those are the two that are starting to appeal to me!
I am in on this. I have some experience with the drug and it is an absolute game changer. Such a different experience from any of other there fads or approaches I have used throughout my life. The other angle on the drug is that it acknowledges obesity as a chronic illness and the general recommendation is that you take it possibly for life. That may be a bit much, but people are losing 50 – 75 and 100 pounds with this in a way that nothing else has ever helped. I like the idea and will be adding it to my port and possibly buying up some options. (And FWIW I am a RN and Psychologist.)
I thought that Mounjaro was principally for diabetics, like Ozempic. I am taking Ozempic and for diabetic control it is fabulous. So Mounjaro is straight weight loss with no connection to diabetes?
Mounjaro is a diabetes drug that was approved last year. It is likely to also be approved for weight loss this year.
Ozempic is also approved for weight loss, but it was approved for that purpose under the name Wegovy, I guess to make the marketing clearer. So far I don’t think Lilly has announced that they’ll use a separate name for marketing the second use of Mounjaro, but they might.
The new drugs function as designed. The first was the Novo version; I made a lot of money on it. Now, the hype is Lilly’s new drug which is approved for type 2 diabetes and is likely to be approved for weight loss. Yes, it should spur Lilly to new heights. A good bet. because it is more effective and costs less than Novo’ Wegovy. On its heels after a year or so is the new Pfizer version which is oral and will be most accepted, I predict. Logically, it will be less expensive also, but that is a year away. For now, expect wealthy Americans to buy the best and least expensive and to stop the diet programs which have not proven effective and certainly are more problems… How big is the market…. probably larger than Viagra was…
My question is, What would Lilly have to charge for the drug for it to be the $50B driver and how does that compare to the cost of Eegovy? Not sure that is an answerable question but it seems to me to be a critical one. I suspect only Lilly has that answer. Thanks Travis
Yes, that’s one reason I rarely dig very deep into Pharma or biotech — figuring out what you can charge, and how that impacts sales volumes, is an inscrutable art.
$VKTX is best in class so far with glp-1/ gip dual at same stage P1. Starting oral version wit P1 results due 2h 2023. Tiny small cap with 2.3 Billion MC. Could potentially be “the” go tonweoght loss drug. They also have potential BIC Nash and a-xld
As a physician, it’s almost sad how much people are flocking to these medications. Almost no patients seem to have ever hear of the potential risk of such medications, such as thyroid cancers, pancreatitis, or pancreatic cancers. Kaiser alone is projected to spend $1B on this class of medications next year. However, most are covered for diabetes, not weight loss. If I had to pick one, I’d say Novo Nordisk, as they have the only oral GLP-1 that I know of (Rybelsus). No one likes injections, and I mean no one. There are multiple GLP-1s and the pick of the day is “whatever is covered.”
I hear you about side effects. Personally, I find the side effects of high blood pressure, cholesterol and blood glucose, outweigh the risks of the side effects of taking the medication. Als0, I agree patients should be sufficiently warned in order to make a decision, balancing their personal risks.
I hear Setmelanotide is going to be the solution. Keyword it on the NIH webpage. Rhythm Parm has it in the works. Share with Mr. Gumshoe and lets hear his thoughts.
That was pitched as the big obesity breakthrough a few years ago, by a different analyst at Stansberry — they’re focused on a much more niche market, at least for now, trying to deal with real hereditary and genetic obesity on a much more dramatic scale, last I checked. That tease came before the Wegovy explosion, though, haven’t looked at RYTM in detail recently — the stock chart says they had some good news about a year ago.
Wygovi/ Rebelsus and Monjauro will all make tons of money. I work with tons of Healthcare workers that gladly inject themselves for weight loss. Monjauro will eventually be the go to drug since it uses 2 receptor approach and is superior in weightloss. Botox places sell it, online weightloss companies sell it.. it’s a gold mine. Look at the freestyle.libre.. it’s a blood glucose sensor that you put on the back of you arm.. change every 2 weeks. You get the blood sugar reading on ur phone.. now a start up is using it as a “blood glucose utilization” to market it to gym rats. Look it up .. supersapiens. The pill will be better for compliance in REAL patients.. aka diabetics, but that shot works and people are paying big time.
As a primary care doc, I prescribe ALOT of diabetes meds. Also, see ALOT of obese and morbidly obese people who would LOVE an easy fix. But as your article so succinctly states, it will depend on insurance coverage. If you go on the Goodrx app. You will see that a month’s supply of this drug, WITH THEIR DISCOUNT CODE is over $1,000 bucks/ month. ( interestinly ALL doses of the drug cost this same amount) There is a VERY limited percentage of the population that is able/willing to pay for this. Coverage by insurance companies would SERIOUSLY affect costs for EVERYONE, with obesity being so ubiquitous at this point. I rather seriously doubt wholesale acceptance/ payment by insurance companies as the numbers just don’t work. Due to the huge percentage of patients with obesity, you would be looking at increasing insurance costs on everyone by thousands of dollars, potentially , for full-scale adoption of just this one drug.
Yeah, it’s a conundrum — same with the Alzheimer’s Disease drugs, which could destroy the economics of Medicare. There will have to be some big-picture rethinking about coverage, and about whether “curing” obesity and Alzheimer’s will eventually cut costs enough elsewhere (less dementia treatment, less heart disease, less diabetes), that blanket authorization should be given. We all want prevention, but it doesn’t seem like the insurance world is necessarily convinced about investing in high-priced prevention just yet.
I do wonder what the production costs of these drugs are, and if there’s a calculus for making a huge mass market at much lower prices, like with Lipitor in the past, instead of charging maximum prices for the drugs for a smaller audience. I guess that’s more likely once the pill-based drugs start to come out in (probably) a few years.
It won’t just be dementia, heart disease & diabetes they will save money on. It has been found that in as well as losing ‘addiction’ to excess food, semaglutide also reduces the compulsion for other addictions, such as nicotine and alcohol. Even opioids. Imagine how much reduction in medical costs would result from that!
Sell on the news from FDA
nd I own a double allotment and it pays a dividend.
My stock is Pfizer and it gas a promising wt. loss drug in Phase 3 and it is a pill.. And it’s a pill & Div
I am looking at a pharmaceutical company that has a combination oral product that decreases LDL-C by 63%, raises HDL, lowers ApoeB, and appears to help with Type 2 diabetes and is being studied for applications in Alzheimers disease. It sounds too good to be true. Their website explains it all.
Travis, could you please take a look at it for us?
Newamsterdam pharma call symbol NAMS.
Thank you
It is truly scary the power of lobbying. When a little history would show when obesity took hold in the USofA and how that connects to the largest lobbying group here now, all I’ll say is don’t eat things that weren’t around for the last supper, and I am a devout atheist!