Latest / Best of Business / Sam Dickie: Fisher Funds expert on the impact of weight-loss drugs on the economy

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Sam Dickie: Fisher Funds expert on the impact of weight-loss drugs on the economy · Best of Business

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  Speaker 1: Heather duper Cela Now.
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  Speaker 2: A couple of years ago, Sam Dicky and I talked
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  Speaker 2: about these new weight loss drugs that were supposedly going
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  Speaker 2: to change everything. You know, we're talking about Ozmpic, WI,
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  Speaker 2: Goby and so on. We've never seen a drug class
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  Speaker 2: of the size before. And Sam from Fisher Funds is
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  Speaker 2: back with us again on this subject. Hey Sam, Hey
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  Speaker 2: that how's it going? Very well?
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  Speaker 3: Thank you?
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  Speaker 2: How these drugs doing now?
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  Speaker 1: Yeah?
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  Speaker 3: Bigger than even the bulls thoughts. So around one in
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  Speaker 3: eight American adults is now on these drugs. And if
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  Speaker 3: you look at it in terms of market capitalization or
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  Speaker 3: valuation of the key companies, at the time Eli Lilly
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  Speaker 3: we talked about was worth about five hundred billion dollars
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  Speaker 3: and that felt pretty big. Today Eli Lilly has just
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  Speaker 3: become the first pharmaceutical company in history worth a trillion dollars.
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  Speaker 3: And the kicker is it seems to be working. So
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  Speaker 3: us OB City has fallen from a peak of forty
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  Speaker 3: percent to seven percent two years and that's the first
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  Speaker 3: reversal in an obesity since nineteen eighty.
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  Speaker 2: Wow, that's extraordinary. Are people sticking with the drugs once
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  Speaker 2: they're on them?
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  Speaker 3: I think that is the killer story that no one's
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  Speaker 3: really talking about. So in the trials where everything's paid
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  Speaker 3: for and the patient's handheld adherence or taking the drugs regularly,
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  Speaker 3: was over eighty percent. But in the real world, two
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  Speaker 3: thirds stop within the first year and only one in
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  Speaker 3: twelve are still on the drugs three years later, and
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  Speaker 3: that seems to be because they're expensive. Side effects are
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  Speaker 3: still pretty tough, and around a quarter of the weight
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  Speaker 3: loss is actually muscle, not flat fat. So remember we
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  Speaker 3: talked about lean and frail, and the sting in the
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  Speaker 3: tail is when people stop, the weight comes back on.
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  Speaker 3: Two thirds of it returns within one and a half years.
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  Speaker 3: So this looks like lesser one off cure and more
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  Speaker 3: of our sort of lifetime prescription if you're able to,
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  Speaker 3: if you want to get the best out of it.
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  Speaker 2: So where is this showing up in the real economy then.
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  Speaker 3: Yeah, really everywhere. So you know, we know these drugs
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  Speaker 3: silence the food noise that constant pull to snack in healthcare,
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  Speaker 3: and this is a bit counterintuitive at the time you
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  Speaker 3: and I talked about a risk to demand for sleep
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  Speaker 3: at near device devices, for example, or a risk to
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  Speaker 3: the demand for gluecose monitors. Now what's actually happened is
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  Speaker 3: they've actually been more of a demand driver because these
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  Speaker 3: funnel more patients to these companies, not fewer. And even
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  Speaker 3: orthopedic surgery looks like a bit of a winner. So
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  Speaker 3: if you have a BMI over thirty five, it rules
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  Speaker 3: out thirty percent of joint replacement candidates. But as you
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  Speaker 3: bring that BMI down, you see more orthopedic surgery. On
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  Speaker 3: the consumer side, US households on these drugs been eight
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  Speaker 3: percent less on fast food and sixty six percent less
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  Speaker 3: on soda and alcohol, so it's definitely having an impact there.
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  Speaker 3: And this is quite an interesting one. I thought. One
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  Speaker 3: of a broker estimates the average US passenger has lost
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  Speaker 3: ten pounds, sorry, not two pounds, ten pounds, saving the
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  Speaker 3: four biggest usdir lines about six hundred million dollars a
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  Speaker 3: year in fuel.
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  Speaker 2: That's natty where it's showing up. It's just absolutely crazy.
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  Speaker 3: Right.
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  Speaker 2: What does this mean then for investors?
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  Speaker 3: I just think I think it means that it has
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  Speaker 3: been bigger than the bulls think. But it doesn't always
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  Speaker 3: mean everyone wins. So the two original players we talked about,
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  Speaker 3: Novo Nordisk and Eli Lilly, they have dramatically diverged. So
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  Speaker 3: Lily's Drugged delivers twenty percent weight loss versus fourteen percent
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  Speaker 3: for Novo Nordisk, and Lily's now got sixty percent of
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  Speaker 3: the US market and has outperformed Novo Nordisk by three
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  Speaker 3: hundred percent. The bottom line, though, is it is one
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  Speaker 3: of the biggest consumer disruptions of our generation, so we
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  Speaker 3: need to keep a close eye on it as it progresses.
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  Speaker 2: Interesting, Sam, thank you very much, appreciate it. Sam Dickey
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  Speaker 2: Official funds.
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