00:00Shares in Danish drugmaker Novo Nordisk jumped nearly 8% after U.S. authorities approved its weight loss pill, Wagovi.
00:09Well, Santosh Rao is the head of research and partner at Manhattan Venture Partners, and he joins me now.
00:15Thank you for coming to join me, Santosh. How positive is this news for investors, do you think?
00:22Yes, thank you for having me. It's great news for investors. It's a shot in the arm for Novo.
00:27They were struggling. They haven't been doing very well. Eli Lilly is going to come up with its own down the road.
00:34And the headline is very good for the weight loss group of companies, of investors who are focused on that, which is a very popular area right now.
00:46Everybody wants to get into it. But this one is a pill, which I don't think it's the headline is great,
00:53but it's not a straight-off winner because the doctors are very cautious in terms of shifting people from injectables to pills,
01:02and the patients are very, very cautious because they're used to a certain way of taking medicines.
01:07So there's some issues down the road, but really to have an option of a pill is great news for the investors,
01:14for the patients, and for the company that we're talking about.
01:17Now, these weight loss medications, they've certainly been a game-changer, haven't they, in the last couple of years?
01:23The move away from injections into oral use, do you see that being welcomed by millions of people?
01:30Do you think that will encourage more consumers to use the product,
01:34maybe people that are frightened of the idea of injecting themselves?
01:37Absolutely. I think that's the gut reaction, gut very, that's the most obvious takeaway from this thing.
01:46People don't like injectables. People don't like to take injections.
01:50Orals are very great.
01:52And to the extent that the effectiveness is the same or even better, that's more case for pills.
01:59So I think on the face of it, it's very good and very popular.
02:05It will expand the market. It's already growing.
02:08It will expand it more. It will bring more people in.
02:11So I think that's great. I think it's good news all around.
02:15Only thing is now we'll have to just wait and see a little bit to see how effective,
02:19how easily adaptable, and how well it will be approved by everyone.
02:24Even if you go to your own doctor, they're very reluctant to kind of move patients around so easily.
02:28They like to make sure that this is really good for you.
02:33So I think that it takes a little bit of going. It's not a straightaway, hey, just move over.
02:38They need to do some tests. But on the face of it, to have that option, I think it's great.
02:43The gut reaction, the first reaction will be to move to the pill side versus injections.
02:47I think that would be mine, if you ask me.
02:50Santoshi, we're talking just now about Eli Lilly, who, of course, are competitors here.
02:55They release Manjaro. There's been a bit of a price war going on between Eli Lilly and Novo Nordisk.
03:03In fact, all of them were Govi, Manjaro, Zempic 2.
03:08Do you see that price war continuing, and how do you see that panning out in the future?
03:13I think this will bring down prices, and that's another factor.
03:18Besides the convenience of taking pills, it's the price factor as well.
03:22For $140 and change, as opposed to a lot more, and insurance coverage very limited for the injectables,
03:31I think that's a no-brainer.
03:33Price, there will be price compression. It'll be good. It'll be more acceptable.
03:37There are so many people who need this thing, but they have stopped taking it, apparently,
03:41because the price is too prohibitive, and the insurance companies don't cover it automatically.
03:45So, things like that.
03:46So, I think in that sense, definitely, it's a price compressor.
03:50President Trump will love it.
03:52And so, all around, I think definitely on the price front, it's favorable to the patients and the investors in terms of overall.
04:00The market is expected to grow.
04:02So, the net CAGR is going to grow.
04:04The outlook is going to grow.
04:06So, the pie is going to get bigger.
04:08So, it'll make up.
04:09The price will come down, but the pie will get better.
04:11So, I think that there will be tremendous demand for this thing down the road.
04:15Santosh Rao, thank you very much indeed for that.
04:20Take care.
