Invest Like the Best with Patrick O'Shaughnessy
· Alex Karnal
And when you think about all the places in the body that it interacts, it then becomes no surprise that it's had such an incredible range of effects, both from protecting us from becoming diabetic, to reducing the risk of having heart attacks and strokes, to lowering our level of inflammation because we're consuming less food, and so we're having less of an inflammatory response to that. All the way through to helping us to lose weight, which is a bit of a virtuous cycle in terms of lowering our blood pressure. So when you look across the five axes – the five layers of defense that are mission critical for maximizing the number of years that we can live and having the most life in those years – I fundamentally believe there's no molecule that's more important than GLP-1 across that entire axis. When we think about the different forms that it's available to us in, we've already cracked the most important code, which is moving from something impractical – 30 shots an hour – to the early days with Amylin Pharmaceuticals of a twice a day shot. To where we are today, which is not just longer acting, once a week versions, but far more potent. Meaning we need far less of it and it actually starts to get to levels that we can inject that have incredible pharmaceutical properties to them. The next axis to think about is not just the form by which you get it – oral or injectable – and not just the duration of the dosing – orals we take every day. Today, we take injectables once a week. There's some amazing ones that Pfizer just acquired that look like it might be a once a month. Amgen's also working on once a month, might be once a quarter. The duration of time between those doses is really important, because the easier it is to take a medicine, the more likely we'll be to stay on these medicines and have the longest-term benefit from them. The next important axis to then focus in on is how do we think about dose, and the trade-offs between semaglutide and tirzepatide. Semaglutide being Ozempic and Wegovy, tirzapatide being Zepbound and Mounjaro. Our team's fundamental perspective is that they all achieve the same goals. They were just novel IP strategies to achieve those same goals. They're all pretty much interchangeable. That leads to the question of, and how do we think about them from an investment perspective and a human impact perspective?
· Alex Karnal
Both of those perspectives come together because when we think about investing in medicine, the key question that we're focused on is why does a medicine have a right to win? And of course, for a medicine to have a right to win, what we're essentially saying is that – this medicine is going to really have a differential impact for people, such that people should choose it. The right to win analysis also comes down to the different segments of the market that we're thinking about. To put a framework around this, we always think about the obesity market as having three main segments. People that are overweight, which are basically BMIs between normal – roughly 25 – and 30. Obese, which is between 30 and 40. And morbidly obese, which is north of 40. When we look at the aperture from a BMI of 25 up to a BMI of just under 40, that's where most of the patients are today that require reactive treatment. I would argue in the future, we could talk about why GLP-1s might be appropriate for just about everyone. And that's because the reality of it is as you go from your adolescence to your 50s and 60s, on average, people are going to pick up about five BMI points. Being able to take a medicine, even at low doses, even though they haven't been tested in those populations, I'm willing to bet, would help protect people from that five-point increase that puts them in harm's way, and puts that to bed. But when we look at the market today, pretty much from that BMI of 25 to 39, they are well-served with any of the available options on the market. I think where we still need some help, and I think where there's a right to win, is really in that BMI zone of 40 and above. Sadly, these people are at a level of body weight that requires incredibly long titration to get up to these high levels of the hormone. And they need to have much more dramatic reduction in their food noise to be able to bring their weights down from a zone that is incredibly dangerous – just given the amounts of visceral fat that they're carrying around – down to levels that are going to give them much more sustainable life.
· Patrick O'Shaughnessy
[00:00:00] S0: Would there be any difference in outcomes if we simply ate the same exact input that we eat on these medicines? If instead of taking the medicine, I just ate exactly what I would eat on them, but figured out a psychological way to deal with the food noise, and just not eat when I'm hungry, effectively. Is there any difference, do we think, in outcomes? And I'm especially thinking here about alcohol addiction – it seems to be one of things that gets addressed by these drugs. That seems unrelated to how much I eat, so it seems like an independent thing that's being positively affected by the drug, beyond just which calories I'm putting into my body. Is there something else going on here beyond just literally what I'm eating as a result of taking these drugs?
· Alex Karnal
[00:00:00] S1: Eating is definitely a part of it, and it's a major part of it. So, look, if we could all be disciplined and we could all get on a proper diet where we're selecting the right foods, eating the right amounts of them, and staying disciplined, you wouldn't really need these medicines for the purposes of managing our weight. But I think that's only going to cut at the weight part of it. I think, unfortunately, if your biology is wired such that you have a family history of diabetes and you are pre-diabetic and on the precipice of turning diabetic, we're starting to be in a place where we're just not producing the insulin that's required to be able to take up that glucose that's coming from the food that we're eating. So yes, by consuming fewer calories and less food, we can hit part of that. I think it's unknown as to whether that'll be enough to be able to undo your progression to diabetes, and so I might say you probably still need those medicines for that. I think the other side of the equation, connected to that, has to do with addiction. In some sense, you could say that food is a form of addiction. While consuming fewer calories will help protect us from the vicious cycle of over-consuming food, in terms of the addiction data that'll start coming out over the next year or so, you would lose that benefit. You would lose the free gift of protecting yourself from being addicted to drugs, alcohol, or gambling. There's an open question on what just consuming food would do for cardiovascular outcomes. We've got compelling data right now at Novo Nordisk over the last year that basically shows that by taking GLP-1 medicines, there is a north of 20% reduction in our risk of having a heart attack or a stroke. And what I thought was pretty profound about the full data that they put out is that that was independent of weight loss. That speaks to me that there's just another axis and another biological driver that's driving this cardioprotective result. We might forfeit that. But without a doubt, if we could actually get access to great food and we can eat the right amount of it and stay disciplined, that would take us a little while.
· Patrick O'Shaughnessy
[00:00:00] S0: But it seems like, summarized, there is more going on than just that. The data seems to suggest that even if I could perfectly eat, I might still reap benefits in other ways from these drugs. To really drive home the point of existing drugs – before we get to all the exciting new stuff, which we'll talk about as well – that there are existing drugs which could have radical impact if everyone was on them. Anything else on GLP-1 that you feel like is especially notable that we haven't talked about?
· Alex Karnal
[00:00:00] S1: The other aspect to it is, we want to start chipping away at what are the layers that exist in between that could prevent people from actually getting the benefit of GLP-1s. When I think about that continuum and I think about that gap, there are basically three different dimensions that are preventing people from getting maximal benefit of a breakthrough medicine that exists and is right here for all of us. Those break up into, in my mind – complexity, cost, and convenience. I started on my journey two years ago, and to practically have to deal with our health system – all of the different branches that it took from recognizing that I had a cholesterol problem, to two years later finally getting access to the medicine that could help protect me from that problem. It's everything from you want to go see a doctor because you get a blood test that says, hey, I got a problem. To learning that, well, the next appointment's only six weeks out. And then I go, and of course, they want to redo the blood test. The friction in our system mounts and mounts and mounts. And eventually, I think a lot of people just give up. It is really hard to navigate that system. Given what we're seeing with GLP-1 medicines, and how we're seeing that the direct-to-consumer side of that is driving most of the adoption today, I think we have to start asking ourselves – why is it that I can go on my iPhone, I can go to Amazon, I click a button, and the next day I can have toothpaste? But it takes me an incredible journey, hundreds of phone calls, multiple doctor visits, being pricked and prodded multiple times, just to protect myself from having a heart attack. That doesn't make sense. I think we have to balance the opportunity for health impact of this amazing medicine that we have, with the reality of how darn complicated it is to navigate through our system. Next is cost. Most medicines that we need to be on for the rest of our lives that are going to be providing the chronic care – the different layers of that defensive health stack that will protect us from these diseases. Those medicines today are priced as similarly to acute treatments, yet they need to be taken over decades. So we have a timeline problem, we have a horizon problem.