Bearish on NVO as a value trap losing GLP-1 share to LLY, bullish on LLY and generic semaglutide makers, and sees VKTX as an acquisition play.
NVO — AVOID Author argues Novo Nordisk is a value trap because it is losing GLP-1 market share to Eli Lilly and its semaglutide is inferior to tirzepatide; semaglutide patent expirations in many countries and 2031 in the US/EU give it only about five years before key market pressure, while LLY's tirzepatide lasts to 2036. The stated catalyst is continued earnings reports showing market-share loss and generic competition in Canada, Brazil, and India; the author warns not to expect outsized returns. Main stated risk to this view is that LLY's earnings tomorrow could flop and invalidate much of the thesis.
Novo Nordisk (NVO) is and has been a value trap.
LLY — LONG Author holds LLY and argues it is the winner in GLP-1s, having taken 42% of GLP-1 revenue and 58% of new prescriptions while its tirzepatide is better than semaglutide and patent-protected until 2036. Orforglipron and retatrutide extend the pipeline into the 2040s, with retatrutide expected in 2027 and likely to dominate the high end. Main stated risk is that if LLY's earnings tomorrow flop, much of the bullish thesis would be out of date.
LLY has eaten all the way to controlling 42% of GLP1 revenue, and 58% of new prescriptions.
SDZNY — LONG Author likes Sandoz more than NVO because it will sell generic semaglutide in Canada soon and launch in Brazil and India, benefiting from Novo Nordisk's semaglutide patent expirations. He has held the stock and calls it one of the generic winners in the GLP-1 space. Risk noted: the stock has already ripped 70% and is now less attractive.
SDZNY will be selling generic semaglutide in Canada very soon, along with a handful of other companies like BIOCON, RDY, and TEVA. All of these companies will also launch in Brazil and India. I have held, and like all these companies more than NVO, especially Sandoz and TEVA
TEVA — LONG Author holds Teva and likes it as a generic semaglutide winner, though he notes the stock has ripped 70% and is now less attractive. The mechanism is generic semaglutide launches in Canada, Brazil, and India as Novo Nordisk's patents expire. Main risk is that much of the price move has already happened.
I have held, and like all these companies more than NVO, especially Sandoz and TEVA (although this thing has ripped 70% and now is less attractive).
RDY — LONG Author lists Dr. Reddy's among generic semaglutide makers that will launch in Brazil and India alongside Sandoz, Biocon, and Teva, and he discloses holding RDY. The thesis is that patent expirations for semaglutide open generic opportunities for these companies. No separate risk beyond the generic-space competition is stated.
SDZNY will be selling generic semaglutide in Canada very soon, along with a handful of other companies like BIOCON, RDY, and TEVA. All of these companies will also launch in Brazil and India. I have held, and like all these companies more than NVO, especially Sandoz and TEVA
BIOCON.NS — LONG Author includes Biocon among generic semaglutide makers that will launch in Canada, Brazil, and India, and says he has held and likes all these generic companies more than NVO. The thesis is that semaglutide patent expirations create a generic opportunity in large markets. Main stated risk is not specific to Biocon, though the space is competitive and the author says Teva has already ripped 70%.
SDZNY will be selling generic semaglutide in Canada very soon, along with a handful of other companies like BIOCON, RDY, and TEVA. All of these companies will also launch in Brazil and India. I have held, and like all these companies more than NVO, especially Sandoz and TEVA
VKTX — LONG Author calls Viking Therapeutics a pure acquisition play because its dual-agonist and oral GLP-1 candidate could be best-in-class, and he expects it could be bought for a similar amount to Metsera's $10B takeover. With Viking's current valuation around $3B, he sees a lot of value and notes NVO should consider acquiring it. Main stated risk is that it is an acquisition play, so if that scares you, move on.
MTSR was bought for 10B, I expect that VKTX has some probability of being bought for a similar amount. Its current valuation of 3B means there is a lot of value here.