WEBVTT - ICYMI: Eli Lilly's New Weight Loss Pill

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg BusinessWeek

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<v Speaker 1>with Carol Masser and Tim Steneveek on Bloomberg Radio.

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<v Speaker 2>We are talking about Eli Lilly, this stock surging after

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<v Speaker 2>data showed its experimental weight loss pill worked as well

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<v Speaker 2>as the ozempic shot, bringing it one step closer for

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<v Speaker 2>developing a needle free alternative. So let's get the details

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<v Speaker 2>from Bloomberg News healthcare reporter Damian guard he's here in Gardier.

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<v Speaker 2>Who's here in studio, Damien? Good to have you here.

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<v Speaker 2>Often running shares of Eli Lilly. I think it's the

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<v Speaker 2>top gainer in the s and P five hundred up

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<v Speaker 2>something like sixteen percent right now.

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<v Speaker 3>Which is a massive gain. I mean, just to note

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<v Speaker 3>this is already a very expensive stock. Lily has flirted

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<v Speaker 3>with becoming the first one trillion dollar drug company in marketcap,

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<v Speaker 3>which I don't think they're there yet, basically based on

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<v Speaker 3>the theory that they can corner the market by consistently

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<v Speaker 3>kind of out innovating themselves in the race for these

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<v Speaker 3>hot obesity medicines that everybody talks about. So to the

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<v Speaker 3>news today, they had pivotal data from a late stage

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<v Speaker 3>study showing that their pill and oral treatment looks like

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<v Speaker 3>it works about as well as the injectable ozembic made

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<v Speaker 3>by its rival Novo Nordisk, at least in patients who

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<v Speaker 3>have type two diabetes. And this was closely watched because

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<v Speaker 3>despite it being a relatively smaller study and it being

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<v Speaker 3>diabetes and not obesity, everybody is looking at the read

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<v Speaker 3>through of what is the weight loss them And if

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<v Speaker 3>this is a pill that you take once a day, hallelujah,

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<v Speaker 3>they can do what a weekly injection can do. That

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<v Speaker 3>is again like a holy grail product in this market.

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<v Speaker 4>A couple things you said, it's not yet a trillion

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<v Speaker 4>dollar company they want to be. It's eight hundred and

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<v Speaker 4>eleven billion dollars. That's acap right now. Today's move higher,

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<v Speaker 4>whopping sixteen percent a pill versus an injection, And look,

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<v Speaker 4>I don't like needles. A lot of people don't like needles.

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<v Speaker 4>Paul Sweeney was on earlier today talking on Bloomberg Intelligence,

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<v Speaker 4>talking about surveillance. He says he's administered this shot. He

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<v Speaker 4>says it's no big deal. His question was more about

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<v Speaker 4>what about side effects here? That seems to be more

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<v Speaker 4>of a barrier, at least in his experience.

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<v Speaker 3>That's true so for people who can get over the

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<v Speaker 3>needle aspect, which is definitely true for people who have

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<v Speaker 3>type two diabetes, and we're finding out based on the

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<v Speaker 3>demand for these medicines that it's true for people who

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<v Speaker 3>want to lose weight as well. The side effect issue

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<v Speaker 3>is all gastro intestinal, or at least those are the

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<v Speaker 3>most common and the most That's what yes vexing for people.

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<v Speaker 3>So looking and again this is something scientists say never

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<v Speaker 3>to do. And dude, anyway, a cross trial comparison, which

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<v Speaker 3>is looking at Lily's data and comparing it to what

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<v Speaker 3>we saw with those empics published data, I would say

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<v Speaker 3>they're relatively comparable. The rates of you're talking about vomiting, diarrhea,

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<v Speaker 3>I apologize, so maybe this is not the toat we

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<v Speaker 3>usually shoot for on this show, and nausea. In some

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<v Speaker 3>cases they were a little higher with Lily's pill. In

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<v Speaker 3>some cases they were higher with the injections. But I

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<v Speaker 3>think the reaction right now is that they look pretty similar.

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<v Speaker 3>But I guess that could end up being the barrier

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<v Speaker 3>in the future if and when this product's approved and

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<v Speaker 3>we kind of remove the needle aspect, it's are you

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<v Speaker 3>comfortable being one of the ten to fifteen percent of

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<v Speaker 3>people who experience those side effects.

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<v Speaker 2>Because I do I know of people who've like moved

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<v Speaker 2>around because they have really bad side effects from certain drugs.

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<v Speaker 2>They're not necessarily apples to apples. There's there's some variances.

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<v Speaker 2>I mean, Novo's down about seven percent. Should Novo be worried.

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<v Speaker 3>Yes, I mean there's an argument that so Lily and

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<v Speaker 3>Novo have been the two giants of this market, Novo

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<v Speaker 3>being based in Denmark, Lily being based in Indiana, and

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<v Speaker 3>they've both been focused on diabetes for I mean, in

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<v Speaker 3>Lily's case, more than one hundred years, dating back to

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<v Speaker 3>like the initial synthesis of insulin, and so they've been

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<v Speaker 3>fighting one another in this place for basically the entirety

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<v Speaker 3>of their corporate histories. These data today and Lily's trajectory.

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<v Speaker 3>Maybe this is unfair, but it feels like they have

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<v Speaker 3>kind of out gamed Novo in this market. Nova has,

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<v Speaker 3>you know, the major product in the form of ozempic,

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<v Speaker 3>but Lily has an injectable medicine that works a little

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<v Speaker 3>bit better than ozempic and now appears to be knocking

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<v Speaker 3>on the door of having a pill.

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<v Speaker 4>What's the next you know, when we think about pipelines,

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<v Speaker 4>this stuff takes years. That's why the startup biotech companies

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<v Speaker 4>are so volatile. If we're thinking about the pipeline, a

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<v Speaker 4>pill is sort of the next iteration, that's the golden goose,

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<v Speaker 4>That's what people are going for. What's next after that?

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<v Speaker 3>So it's interesting because everybody has kind of differentiated You just.

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<v Speaker 2>Breathe in, you spray something and just really no, I'm

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<v Speaker 2>just kidding, that's a mist would not be so bad.

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<v Speaker 3>Not impossible, I think scientifically as well. But barring the

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<v Speaker 3>you know, aerosolization of GLP one kids, I don't think

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<v Speaker 3>we're there yet. Okay, So both Lily and Novo and

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<v Speaker 3>a few other companies including Astrozenca are kind of moving

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<v Speaker 3>in parallel tracks where there is the move to develop

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<v Speaker 3>oral medicines that might lead to a little less weight

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<v Speaker 3>loss but would be more accessible and were able to

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<v Speaker 3>produce and cheap to produce. And then there's a next

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<v Speaker 3>generation of injectables that appear to, at least so far,

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<v Speaker 3>have even stronger effects on body weight, So twenty to

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<v Speaker 3>twenty five percent body weight loss versus the smaller numbers

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<v Speaker 3>we see and the theory is that by let's say

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<v Speaker 3>the end of the decade, if all these things work,

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<v Speaker 3>it would be kind of like an armamentarium for people

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<v Speaker 3>looking for treatments. For people who have obesity such that

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<v Speaker 3>losing twenty five percent of their body weight is medically

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<v Speaker 3>necessary for their health, you would have the kind of

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<v Speaker 3>like big guns. This is all a little crude, but

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<v Speaker 3>the more efficacious injectable treatments. And then for people for

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<v Speaker 3>whom a smaller percentage body weight treatment is more desirable,

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<v Speaker 3>or who perhaps just need to maintain loss that they

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<v Speaker 3>got from one of those drugs, you would have the pills.

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<v Speaker 2>So kind of a menu of drugs. Right. Essentially, Hey, Eli,

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<v Speaker 2>Lily is the top gainer in the s and P

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<v Speaker 2>five hundred. United Health is the top decliner. I just

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<v Speaker 2>we've got you got to ask. Stocks down like twenty

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<v Speaker 2>three percent. Here they cut its annual forecast and reported

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<v Speaker 2>its first earnings missing over a decade. What do we

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<v Speaker 2>need to know about this? Is this also an industry

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<v Speaker 2>wide problem because it dragged down the group Today.

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<v Speaker 3>It does seem like it. The word ominous has been

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<v Speaker 3>invoked a few times now. United Health is difficult to

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<v Speaker 3>crosscut because they are this like octopus of healthcare. They

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<v Speaker 3>do everything, sort of developed their own medicines, but in

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<v Speaker 3>terms of insurance managed care, they are a you know,

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<v Speaker 3>arguably kind of monoymous. Yeah, and so, but in that

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<v Speaker 3>sense they are perceived as a bellweather. So they report earnings,

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<v Speaker 3>they have this unforeseen issue with their profitability relating to

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<v Speaker 3>Medicare advantage or sort of a supplementary insurance program. And

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<v Speaker 3>I think part of the ominous nature of that is

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<v Speaker 3>the thing they're suffering from is from basically a government

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<v Speaker 3>crackdown on how Medicare advantage works that began last year.

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<v Speaker 3>And you might think that that would alleviate under a

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<v Speaker 3>new administration, but doctor oz memet Oz, who is stepping

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<v Speaker 3>into the role of leading the federal agency that runs Medicare,

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<v Speaker 3>was very fiery in his Senate confirmation hearing about exactly

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<v Speaker 3>this issue. And so I think some of the stock

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<v Speaker 3>reaction is not just the shock of, as you mentioned,

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<v Speaker 3>the superlative of United missing earnings for the first time

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<v Speaker 3>in a decade, but also that like the storm clouds

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<v Speaker 3>seem to just still be on the horizon.

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<v Speaker 2>Yeah, storm clouds over another industry is what a kind

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<v Speaker 2>of feels like what.

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<v Speaker 4>He can talk about anything. Damian Guardia can talk about anything.

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<v Speaker 4>It's like he's been writing about Lily all day and

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<v Speaker 4>you throw him the United Health question and he knocks

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<v Speaker 4>it out of the park.

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<v Speaker 2>Thank you so much.

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<v Speaker 3>Time we can talk about doctor Oz.

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<v Speaker 4>Thanks for joining us.

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<v Speaker 2>Blimberg News healthcare reporter Damian Guardi