Morgan Stanley analysts believe the market for obesity drugs is even larger than initially expected, a finding that aligns with our rosy outlook on Eli Lilly (LLY). Meanwhile, commentary from one of Danaher ‘s (DHR) competitors is sending shares of the Club holding surging Friday, while the top boss at one of our chipmakers offered reassuring remarks around managing geopolitical risks. Here’s our full take on the headlines and their implications for our investments in the three companies. LLY YTD mountain Eli Lilly (LLY) year-to-date performance. The news: Obesity drugs could generate annual sales up to $77 billion in 2030, Morgan Stanley said Friday, a nearly 43% increase to the firm’s previous forecast. And despite increasing competition from other pharmaceutical companies, Morgan Stanley analysts expect Club name Eli Lilly and rival Novo Nordisk (NVO) to remain the leading weight-loss players, with a combined market share around 82% over the long term. “The enormous supply chain investments Novo and Lilly are making today will create significant barriers to entry in the future,” the firm wrote. Insurance reimbursement for obesity drugs has spread quicker than Morgan Stanley expected, which helped prompt the firm to update its multiyear sales outlook. The firm’s analysts said that, if not for supply shortages, sales of Novo’s obesity therapy, Wegovy, would have likely topped $7 billion in the U.S. this year. Currently, Wall Street estimates Wegovy’s 2023 sales to be $4.46 billion, according to FactSet, rising to $7.76 billion in 2024. Wegovy belongs to a class of incretin drugs known broadly as GLP-1s , which mimic a gut hormone that, when released, can suppress appetite. Novo also sells a GLP-1 called Ozempic that’s approved in the U.S. to treat type-2 diabetes. Eli Lilly’s leading GLP-1 is called Mounjaro, and unlike Wegovy and Ozempic, it targets a second hormone involved in blood-sugar control. U.S. regulators cleared Mounjaro as a type-2 diabetes…
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