1 00:00:05,559 --> 00:00:08,280 Speaker 1: Welcome to Fear and Greed. Some are investing series brought 2 00:00:08,320 --> 00:00:11,440 Speaker 1: to you by Vanter, specialists in compliance led growth. I'm 3 00:00:11,440 --> 00:00:14,840 Speaker 1: Sean Almer. The rise of GLP one drugs think of 4 00:00:14,960 --> 00:00:18,720 Speaker 1: Zenpic and Lagobi has been one of the biggest developments 5 00:00:18,760 --> 00:00:21,280 Speaker 1: in global healthcare in the last few years. The drugs 6 00:00:21,320 --> 00:00:23,560 Speaker 1: can be used for weight loss and management of conditions 7 00:00:23,600 --> 00:00:26,880 Speaker 1: like type two diabetes. As always, this is general information 8 00:00:27,000 --> 00:00:30,800 Speaker 1: only and you should seek independent advice before making investment decisions. 9 00:00:31,040 --> 00:00:34,600 Speaker 1: Steve Ween is the Managing Director Equery Research at Jardam Australia, 10 00:00:34,640 --> 00:00:37,320 Speaker 1: heading up their healthcare team. Steve, Welcome to Fear and Greed. 11 00:00:38,000 --> 00:00:39,560 Speaker 2: Thanks very much, sure and good to be here. 12 00:00:40,720 --> 00:00:43,919 Speaker 1: These weight loss drugs JLP one drugs, it seems in 13 00:00:43,960 --> 00:00:46,640 Speaker 1: my experience, I don't think I've ever seen in the 14 00:00:46,640 --> 00:00:52,199 Speaker 1: healthcare sector a class of drugs make as much noise 15 00:00:52,880 --> 00:00:54,000 Speaker 1: as these drugs. 16 00:00:53,680 --> 00:01:00,400 Speaker 2: Have made have I and it is quite extraordinary the 17 00:01:00,400 --> 00:01:04,200 Speaker 2: the benefits that it is being able to demonstrate, which 18 00:01:04,600 --> 00:01:12,039 Speaker 2: includes treating diabetes, cardiovascular disease, treating sleep apnea and weight loss. 19 00:01:12,319 --> 00:01:17,440 Speaker 2: So quite a wonder drug that Americans seem to love 20 00:01:17,640 --> 00:01:20,360 Speaker 2: because it is that sort of silver bullet to a 21 00:01:20,440 --> 00:01:22,920 Speaker 2: number of conditions that they seemingly experience. 22 00:01:24,040 --> 00:01:27,360 Speaker 1: Are there In terms of an investor, how do you 23 00:01:27,440 --> 00:01:31,000 Speaker 1: get into that market? Is it possible? 24 00:01:31,800 --> 00:01:35,960 Speaker 2: I mean there's two major providers or manufacturers of that, 25 00:01:36,000 --> 00:01:38,800 Speaker 2: which is Eli Lilly and Novo and Orders both not 26 00:01:38,880 --> 00:01:41,720 Speaker 2: listed in Australia. So from an Australian perspective, it's very 27 00:01:41,800 --> 00:01:45,400 Speaker 2: difficult to get access to participating in that. There's a 28 00:01:45,520 --> 00:01:51,040 Speaker 2: number of compounding companies that are trying to replicate it, 29 00:01:51,080 --> 00:01:55,880 Speaker 2: which we know will fall short of the law. I 30 00:01:55,920 --> 00:01:59,040 Speaker 2: think ultimately, because these are patterned drugs and your ability 31 00:01:59,080 --> 00:02:03,240 Speaker 2: to replicate them is somewhat problematic. So I probably wouldn't 32 00:02:03,240 --> 00:02:06,120 Speaker 2: be looking out for any of those, but if you 33 00:02:06,160 --> 00:02:08,840 Speaker 2: wanted to access it, then you would be. You'd be 34 00:02:09,000 --> 00:02:13,000 Speaker 2: most likely to gravitate towards it by some equity in 35 00:02:13,200 --> 00:02:15,160 Speaker 2: Novo nordeskan ililally. 36 00:02:15,360 --> 00:02:18,800 Speaker 1: Okay, I mean there's sort of phase two of these drugs. 37 00:02:19,080 --> 00:02:21,640 Speaker 1: Someone has said, you know, if you can see companies 38 00:02:21,680 --> 00:02:23,919 Speaker 1: that are going to put out phase two of these drugs. 39 00:02:23,919 --> 00:02:25,679 Speaker 1: But what you're saying is because of patterns and things 40 00:02:25,720 --> 00:02:27,920 Speaker 1: like that, that's easier said than done. 41 00:02:28,160 --> 00:02:31,800 Speaker 2: That's right. So I mean they're invading all the time. 42 00:02:32,000 --> 00:02:34,200 Speaker 2: There is a ton of money coming at this space, 43 00:02:34,320 --> 00:02:37,600 Speaker 2: so there will be alternatives out there, and who they 44 00:02:37,600 --> 00:02:41,280 Speaker 2: are and who who ultimately gets accepted by the FDA 45 00:02:41,440 --> 00:02:45,440 Speaker 2: is having something that's differentiated enough and doesn't breach existing patterns. 46 00:02:46,200 --> 00:02:48,720 Speaker 2: It will be the winners. But we have no real 47 00:02:48,800 --> 00:02:51,120 Speaker 2: line of sight to that in Australia, certainly with our 48 00:02:51,160 --> 00:02:54,520 Speaker 2: focus on the companies that are listed here, it is 49 00:02:55,120 --> 00:02:59,839 Speaker 2: really not a strong focus from my perspective. However, where 50 00:03:00,040 --> 00:03:05,440 Speaker 2: my focus includes this particular drug is the implications it 51 00:03:05,480 --> 00:03:09,400 Speaker 2: has on other stocks as a result of the benefits 52 00:03:09,400 --> 00:03:11,760 Speaker 2: that you can have from being treated with a GLP 53 00:03:11,880 --> 00:03:12,799 Speaker 2: one Okay. 54 00:03:12,560 --> 00:03:14,840 Speaker 1: So let's talk about resident sleep happen you group, they've 55 00:03:14,840 --> 00:03:18,280 Speaker 1: come out and said that they could be affected by 56 00:03:18,760 --> 00:03:21,560 Speaker 1: these GLP one drugs. How do you think about it 57 00:03:21,639 --> 00:03:22,400 Speaker 1: as an investor? 58 00:03:23,040 --> 00:03:25,680 Speaker 2: Yeah, it's a very tricky. How long is a piece 59 00:03:25,720 --> 00:03:28,960 Speaker 2: of string type scenario. But the way I have treated 60 00:03:28,960 --> 00:03:33,119 Speaker 2: it within my forecast for resmet So just a little 61 00:03:33,160 --> 00:03:37,120 Speaker 2: bit of backdrop there. The Eli Lilly have a drug 62 00:03:37,160 --> 00:03:41,160 Speaker 2: called Monjaro which has just been released some Phase three 63 00:03:41,320 --> 00:03:45,720 Speaker 2: trial data around its ability to treat sleep apnea had 64 00:03:45,760 --> 00:03:49,080 Speaker 2: some pretty impressive results and is on the way to 65 00:03:49,120 --> 00:03:52,720 Speaker 2: getting a label for that from the FDA, so that 66 00:03:52,920 --> 00:03:56,120 Speaker 2: is something that will happen shortly. In the meantime, everyone's 67 00:03:56,120 --> 00:03:58,600 Speaker 2: looking at ResMed thinking what are the implications. Is this 68 00:03:58,680 --> 00:04:02,520 Speaker 2: a potential if you are for sleep apnea and you 69 00:04:02,560 --> 00:04:05,240 Speaker 2: will no longer need your SEATPAP machine or your masks 70 00:04:05,280 --> 00:04:08,480 Speaker 2: that they are using to currently treat it. So my 71 00:04:08,640 --> 00:04:10,640 Speaker 2: view is I have a look at what the risk 72 00:04:10,920 --> 00:04:14,520 Speaker 2: to the total market size is. I look at whether 73 00:04:14,840 --> 00:04:18,600 Speaker 2: what my expectations is around insurance coverage because it's a 74 00:04:18,720 --> 00:04:23,200 Speaker 2: very very costly drug. I look at examples of what 75 00:04:23,279 --> 00:04:25,880 Speaker 2: the real world evidence is like is how long people's 76 00:04:26,200 --> 00:04:29,400 Speaker 2: last on these drugs. And that's the biggest kind of 77 00:04:30,000 --> 00:04:32,320 Speaker 2: you know, people are currently thinking that it's a cure 78 00:04:32,360 --> 00:04:34,960 Speaker 2: for everything, but people don't like these drugs when they're 79 00:04:34,960 --> 00:04:37,560 Speaker 2: on it. That makes them feel nauseous. There are a 80 00:04:37,600 --> 00:04:40,039 Speaker 2: number of side effects. There's literally something that came out 81 00:04:40,080 --> 00:04:43,159 Speaker 2: overnight which is linking it to an eye disorder which 82 00:04:43,200 --> 00:04:46,880 Speaker 2: is causing sight loss. So there are some real side 83 00:04:46,920 --> 00:04:49,520 Speaker 2: effects to this. And what is the mix then, is 84 00:04:49,560 --> 00:04:52,880 Speaker 2: to how long people last on it keep that weight off, 85 00:04:53,080 --> 00:04:56,200 Speaker 2: which ultimately reduces their level or the severity of their 86 00:04:56,240 --> 00:04:56,919 Speaker 2: sleep apnea. 87 00:04:57,760 --> 00:05:01,560 Speaker 1: I'm probably asking you an impossible question, Steve. So with 88 00:05:01,680 --> 00:05:04,400 Speaker 1: all that, the thing about the GLP one drugs is 89 00:05:04,440 --> 00:05:06,039 Speaker 1: that we actually don't know the long term effects of them, 90 00:05:06,120 --> 00:05:09,320 Speaker 1: simply because they haven't been around long enough. You can't 91 00:05:09,320 --> 00:05:11,479 Speaker 1: ignore them. When you're investing in reds Men or other 92 00:05:12,480 --> 00:05:15,359 Speaker 1: companies who are treatments for all sorts of things. Do 93 00:05:15,440 --> 00:05:18,960 Speaker 1: you just sort of say there's a twenty percent chance 94 00:05:19,000 --> 00:05:21,320 Speaker 1: that this is going to dent it. Like, I'm just 95 00:05:21,320 --> 00:05:24,840 Speaker 1: trying to get my head around how you think about 96 00:05:24,839 --> 00:05:28,440 Speaker 1: it in your portfolio and the infected effect it has. 97 00:05:28,680 --> 00:05:31,559 Speaker 2: Well, there's two sides to this. So the way I've 98 00:05:31,600 --> 00:05:36,200 Speaker 2: adopted it is I've shipped my valuation by sixteen percent, 99 00:05:36,520 --> 00:05:38,520 Speaker 2: so that's currently my numbers, and I've still got to 100 00:05:38,520 --> 00:05:42,400 Speaker 2: buy on it or overweight recommendation on it. And that 101 00:05:43,120 --> 00:05:46,960 Speaker 2: is an impact that I have coming into the forecast 102 00:05:47,000 --> 00:05:49,240 Speaker 2: for this company for the next five years. So by 103 00:05:49,279 --> 00:05:53,200 Speaker 2: the time we get to twenty thirty, I'm in my 104 00:05:53,320 --> 00:05:57,000 Speaker 2: numbers indicating that that's going to be the maximum damage 105 00:05:57,160 --> 00:06:00,640 Speaker 2: that a GLP one drug could have on the take 106 00:06:00,720 --> 00:06:04,919 Speaker 2: up of seapap therapy. Now the flip side of that is, 107 00:06:04,960 --> 00:06:07,320 Speaker 2: and this is what's really interesting at the moment is 108 00:06:07,680 --> 00:06:10,600 Speaker 2: with all of this talk around gop ones, the awareness 109 00:06:10,640 --> 00:06:13,680 Speaker 2: of sleep apnea has gone through the roof now or 110 00:06:13,720 --> 00:06:17,880 Speaker 2: you're finding his physicians are actively testing for sleep apnea 111 00:06:17,960 --> 00:06:21,160 Speaker 2: when previously they had never done so before. So what 112 00:06:21,200 --> 00:06:23,760 Speaker 2: I'm seeing at the moment in the quarterly numbers by Resume, 113 00:06:23,960 --> 00:06:28,080 Speaker 2: we are seeing extraordinary growth rates of take up of 114 00:06:28,160 --> 00:06:31,760 Speaker 2: people being diagnosed with sleep apnea and the devices as 115 00:06:31,800 --> 00:06:34,920 Speaker 2: a result. So remember, when you take a gop one drug, 116 00:06:35,320 --> 00:06:37,400 Speaker 2: it takes more than twelve months for you to lose 117 00:06:37,400 --> 00:06:41,360 Speaker 2: the weight that would have any impact on your sleep apnea. 118 00:06:41,720 --> 00:06:44,760 Speaker 2: So do you want to have twelve months of no 119 00:06:44,960 --> 00:06:48,000 Speaker 2: sleep or interrupted sleep or do you want to sort 120 00:06:48,040 --> 00:06:51,479 Speaker 2: of address that issue straight away. So that's what's driving it. 121 00:06:51,520 --> 00:06:55,400 Speaker 2: And then what's happening now is that Samsung and Apple 122 00:06:55,600 --> 00:06:59,599 Speaker 2: are now putting onto their watches or their wearable devices prompts. 123 00:06:59,600 --> 00:07:01,839 Speaker 2: They've got sensors on the back of the watches that 124 00:07:01,880 --> 00:07:05,839 Speaker 2: can actually detect whether or not you've had events during 125 00:07:05,880 --> 00:07:08,320 Speaker 2: the night, and then it will prompt you in the morning, hey, 126 00:07:08,360 --> 00:07:10,440 Speaker 2: you should have a look at your sleep apnea because 127 00:07:10,840 --> 00:07:14,520 Speaker 2: your blood oxygenation levels were down during the night and 128 00:07:14,880 --> 00:07:18,320 Speaker 2: that's a prime sign that you might have sleep APNA. 129 00:07:18,400 --> 00:07:20,400 Speaker 2: So you go to the doctor. The doctor tells you 130 00:07:20,440 --> 00:07:23,280 Speaker 2: to have a test. Then you get put on a seapap. 131 00:07:23,680 --> 00:07:25,880 Speaker 2: Maybe you're taking a GLP one at the same time, 132 00:07:25,920 --> 00:07:29,200 Speaker 2: and in eighteen months time you might stop your therapy. 133 00:07:29,240 --> 00:07:31,800 Speaker 2: But meanwhile you've bought the device. You bought the masks 134 00:07:32,120 --> 00:07:34,960 Speaker 2: resmets happy. Investors would be happy. 135 00:07:35,080 --> 00:07:37,200 Speaker 1: Fantastic see thank you for your time. 136 00:07:37,120 --> 00:07:37,960 Speaker 2: No problems at all. 137 00:07:38,600 --> 00:07:41,560 Speaker 1: That was Steve Ween, Managing Director Equity Research at Jarden. 138 00:07:41,640 --> 00:07:44,920 Speaker 1: Remember to get your own independent advice before making decisions. 139 00:07:44,920 --> 00:07:47,720 Speaker 1: This is very ingred Summer Investing series brought to you 140 00:07:47,760 --> 00:07:51,760 Speaker 1: by vana Venta automates compliance for frameworks like ISO twenty 141 00:07:51,760 --> 00:07:56,120 Speaker 1: seven one two, CPS two three four and Essential eight, 142 00:07:56,440 --> 00:07:59,320 Speaker 1: saving time and money while building trust. Join over eight 143 00:07:59,320 --> 00:08:02,440 Speaker 1: thousand companies. He's like a Lassian dovetail fire Anton Tactic 144 00:08:02,720 --> 00:08:06,520 Speaker 1: dot Io managing real time risk. Get a thousand dollars 145 00:08:06,520 --> 00:08:09,240 Speaker 1: off at vant dot com, slash fear and greed. I'm 146 00:08:09,240 --> 00:08:10,800 Speaker 1: suan elma Enjoy your day.