Novo Nordisk and Eli Lilly can both gain GLP-1 market share this year, says Citi's Meacham
Speakers
Geoff Meacham
— Head of Healthcare Research, Citi
Summary
Geoff Meacham, Citi's head of healthcare research, joined Fast Money to discuss the outlook for obesity/GLP-1 drugs and biopharma themes ahead of JPMorgan's healthcare conference. He argued Novo Nordisk and Eli Lilly can both gain GLP-1 share as broader Medicare/Medicaid access drives utilization, with the competition not being zero-sum. He also identified Amgen, Pfizer, Structure Therapeutics and Viking Therapeutics as possible additional obesity winners, while cautioning that smaller players may need corporate partners for Phase 3. Separately, he expects quieter policy headlines to be a positive for the biopharma group.
- Meacham says Novo and Lilly can both gain GLP-1 market share this year.
- He views obesity competition as not zero-sum, helped by Medicare/Medicaid access.
- Amgen may be a third winner due to existing Phase 3 obesity trials.
- Pfizer is investing heavily in Phase 2/3 obesity trials and should not be counted out.
- Smaller players like Structure and Viking could win but likely need partners and deeper pockets.
- Phase 3 data, not Phase 1/2 proof of concept, is the key test.
- He expects less negative policy noise, a positive for the biopharma group.
- JPM healthcare conference could bring deal announcements, but no specific trade call.
Ideas
GLP-1 not zero-sum; both gain share
Meacham expects Novo Nordisk versus Eli Lilly competition in GLP-1/obesity to remain dramatic this year, but he views it as not a zero-sum game. Broader access from the Medicare/Medicaid agreement reached with the White House last fall should drive much greater utilization for both companies' medicines, so both Novo and Lilly can gain share this year.
Pfizer obesity trials; don't count out
Meacham says Pfizer is investing heavily in Phase 2 and Phase 3 obesity/weight-loss trials, and he would not count the company out as a future winner in the GLP-1/obesity market.
Amgen Phase 3 may win slice
Meacham notes Amgen is already in a bunch of Phase 3 obesity/weight-loss trials, so Citi's modeling out to 2030-2032 gives Amgen a possible slice of the market as an additional winner beyond Novo and Lilly.
Small obesity names need partners
Meacham says there is room for two or three more obesity players beyond Novo/Lilly and he would not count out smaller names such as Structure Therapeutics or Viking Therapeutics, but he cautions that smaller players likely need deeper pockets and a corporate partner to get through large-scale Phase 3 trials.
Quieter policy is positive for biopharma
Meacham says a key theme from large-cap biopharma management teams is that policy noise and negative policy headlines should be quieter than last year. Getting confirmation that there are no new negative policy worries would be a big deal for the biopharma group.
