Novo Halves Ozempic Price to $499 a Month For Those Paying Cash

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2:02We had some FDA approvals. They're pushing gains in some pharmaceutical companies, specifically Novo Nordisk. So here to break that down and a whole lot more news that's coming out about Novo is Madison Mueller. She's Bloomberg health reporter. But the big news, so the weight loss drug Wegovi got this US approval to treat a form of liver disease. So what does this mean for the company? Yeah, so on Friday afternoon, late on Friday, Novo Nordisk got approval for Wegovi, which is its weight loss drug, to treat a liver disease called MASH. And this sort of is a, we've seen over the last couple of years, so many studies come out to show the potential health benefits of these weight loss drugs beyond just, you know, reducing the number on the scale.

2:44And we knew from studies that there was some benefit to the liver from taking these drugs. And so Nova was able to notch an approval for that, which helps one with insurance coverage. Wagovi and then Eli Lilly's drug ZepBound are still not super widely covered by insurance companies for weight loss. But having some of these other health benefits shown and proven in studies helps them convince insurers that they are worth covering. And so this gives them an edge against Lilly. Lilly's drug ZepBound is not approved yet for this indication. And so it gives them sort of a leg up there. And then it also gets I mean, it sort of is another benefit for Novo because they've been struggling over the last year just with ZepBound sort of making waves in the market and taking market share from Wigovi.

3:38this gives them a leg up there as well. And just with the tumultuousness of the last few weeks, they had a CEO ouster and a few other moving pieces. So this is good news for them. And we'll we'll see. But it will maybe help them gain back some market share. One of the issues for these weight loss drugs is the cost. And if you're not covered by insurance, They really are expensive. So by slashing the cost of Ozempic in half, does the company believe that's going to open up a big new vein of new customers, maybe? So it's interesting because if patients are on Ozempic, they are usually on a type 2 diabetes treatment.

4:20And usually that's covered by insurance. So it's primarily for the type 2 diabetes, but does it have a side benefit, I guess, of weight loss? Yes. So, I mean, there are two different drugs, right? There's Ozempic, which is the diabetes drug of Wagovi. They both use the exact same active ingredient, which is semaglutide. Wegovi is a higher dose version. If you're on Ozempic, it's lower doses. So it's not quite as strong. But there is that weight loss side effect on both drugs. Previously, Novo actually did cut the cost of Wegovi down to about the same price,$500 a month back in March. And now they are doing the same for Ozempic.

4:55But it's interesting because the question of whether or not this is going to expand access for more patients sort of remains to be seen. Because, again, if you have Ozempic, you usually are covered by insurance for it. Now, something I also said they're partnering in this article. It said with GoodRx to offer Ozempic, we go for the same price as pharmacies. But didn't Novo try the partnership thing with HIMSS and hers and that didn't work out so well? Yeah, yeah. Yeah, so HIMSS was one of several partners that Novo has sort of worked with over the last couple of months, again, to really make waves and get into this market or gain back market share because it's really lost ground to Eli Lilly.

5:33HIMSS was one of the companies that they partnered with. They've partnered with a couple of other telehealth companies, as well as CVS, to make this cash pay price more widely available. But this is the first time that they're dropping the price of Ozempic as well. So this partnership with GoodRx, you know, any patient is essentially a coupon. Like any patient who goes to a pharmacy, uses GoodRx, is going to be able to get this cash pay price for Ozempic and Wegovi. You mentioned the HIMSS and HERS, those compound drugs. How effective are they vis-a-vis the GLP ones themselves? Because that would be a, if I were like Novo Nordics, I spent all this money to develop.

6:11That would be a bummer to see these guys come out. And that's a really good question, actually. That question of how effective are these drugs, because that's the problem is we don't know. There are studies that drug makers are required to do. They have to go through a lengthy FDA approval process to prove that their medications are safe and effective. Compounded drugs don't go through that same approval process. So there's no actual studies showing how effective those medications are. And it's a little bit of a gamble. I mean, we've seen patients losing weight on these compounded medications.

6:41And we haven't seen a tremendous amount of side effects that are really different from the branded medications. So the problem is just more that we don't actually have a lot of visibility into that compounded market and don't know how those drugs stack up to the branded medications. In the last 30 seconds or so we have, where does this all put Eli Lilly then? I mean, they already had the setback with the weight loss pill. So now we're hearing all this about Nova. Where does this put them? Yeah, yeah. I mean, it's been it's interesting. Like the two companies, I think last year, it was just they were so red hot and there was like nothing.

7:18The expectations were sky high. There was really nothing that seemingly could bring them down. But now we're seeing a couple of stumbles. And I think that that shows, again, how high the expectations are for this market. There's just no room for failure. But we'll see what happens next. Clearly, when is the pill going to be available? Six months, 12 months, a year? Sometime 2026. So they said that they're planning to file for FDA approval by the end of the year and then hopefully launch next year. Stay with us. More from Bloomberg Intelligence coming up after this. Looking for more investing options?

7:50Meet SIBO, the exchange that pioneered options trading. With exclusive trading products like VIX and SPX options, SIBO can help you trade in any market environment. There are risks associated with SIBO company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. This episode sponsored by Minky Couture. Fair warning, bring a Minky Couture blanket home and it may instantly become the most wanted seat in the house. That's the magic of Minky Couture. Minky Couture created the original soft Minky blanket, trusted for premium quality and custom styles. One touch and movie nights, naps and cold mornings suddenly revolve around who got to it first.

8:28Shop now at MinkyCouture.com. That's Minky, M-I-N-K-Y, Couture, C-O-U-T-U-R-E, dot com. Go to MinkyCouture.com and get your Minky Couture blanket now before everyone in your house claims it is theirs. Our hometown is not a test tube. 90 miles northeast of Nashville, a battle for the future of America, plays out in one small town. Developers with right-wing ties have purchased hundreds of acres of land. We need cities on a shining hill. This is Our Town, a podcast about what happens when a small town becomes the site of a social experiment and fights back. Guess you didn't move in on a bunch of dumb hillbillies now, did you?

9:08Listen to Our Town on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

9:19You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We do have some possible deal-making news. So sources saying Toma Bravo in talks about human resources management software provider Dayforce and take the company private. So what does this all mean? Well, we have the right person to break it all down for us. It's Neeraj Patel, Bloomberg Intelligence Senior Software Analyst. Neeraj, you're joining us from Princeton.

9:52Thanks for joining. I want you to see if you can talk to us about Dayforce, because I'm reading through the article. It says shares are falling about 60 % from their 2021 peak through Friday. Can you talk about some of the things that this company has been struggling with? Yeah. Hi, Lisa. This has been even beyond a Dayforce struggling point. The HCM industry, which they play in, the HR and payroll software, that has been under pressure along with application software. And just for a little bit of valuation perspective, application software companies, they're in the 17th percentile of their historical range, and Dayforce is at an all-time low.

10:32And this is telling because they are facing a lot of deceleration on the top line. In 2021-2022, they were at 22 % sales growth. Now we're looking at 11 % for this year and next year. And there's a lot of factors coming into play here. They have a lot of competition. The customers are slowing in terms of new ads, as well as the upsell and cross-sell to existing customers. So is this just the spending and human resources part of the pie? Is that slowing or is it competition here? What's the problem for some of these companies? Yeah, their competition push is limited. They play in the larger enterprise segment.

11:19So they run into UKG or Workday. So it's not so much competition, but it's a little bit of a macro trend. You have the U.S. labor non-farm payroll additions, which decelerates significantly. And that's growing at about a 1 % pace. It averages 2 % to 3%. So we have a macro factor. Second, they have a portfolio which is common to a lot of peers. So there's a lot of portfolio convergence in HR software. It's covering like payroll scope, account administration, workforce management, talent management, learning management. So these players have all converged on the same portfolio. They're trying to push that sale, but there's only a limiting sale per customer that they're able to translate to.

12:07For example, they're selling about$13 of software per employee, and it's only growing at a 5 % pace. Now, Naraj, were you surprised by this report? Because it seems like from how you were talking, I mean, kind of this path was leading to the way it is that this report came out today. Yeah, no, this didn't catch us by surprise in the sense that we're expecting more consolidation. Paycheck acquired Paycor in April, and that was a smaller player. that targeted more small SMB segments. This player, Dayforce, they're targeting a large mid-market customer. So we're not surprised. The valuations are quite low.

12:46The one positive factor here is HCM ranking in terms of AI disruption across app software is on the lower side. Sales and marketing is on the higher end. IT service management is on the higher end. So that may be a little bit of the appeal coming from Thomas Bravo's lens, where the AI agents are I'm not going to take over the app function in HR software so easily. Stay with us. More from Bloomberg Intelligence coming up after this. Our hometown is not a test tube. 90 miles northeast of Nashville, a battle for the future of America plays out in one small town. Developers with right-wing ties have purchased hundreds of acres of land.

13:26We need cities on a shining hill. This is Our Town, a podcast about what happens when a small town becomes the site of a social experiment. and fights back. Guess you didn't move in on a bunch of dumb hillbillies now, did you? Listen to Our Town on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

13:50You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. So Air Canada, right? They pulled their financial guidance through year-end. Thousands of Air Canada flight attendants, they walked out over the weekend. So what we're going to do is find out more behind the strikes, more behind of what's going on. Here with us to explain more is Francois Duflo. He is U.S. airline aerospace analyst here. Francois, thanks for joining us over from the Princeton office.

14:25First off, I mean, this is the peak travel summer season. How much of an impact is it going to have for the company? Yes, good morning. Yes, exactly. That's the worst time that it could happen. August is one of the busiest, is the busiest month of the year. And when we look at the number of consolation during this weekend, almost 80 % of the flight and the seat were canceled during this weekend. So it's really significant. When we try to do the math, we get to something around 200 million impact revenue. So that would be about 3 % of the 6.2, 6.3 billion revenue expected for this quarter. So it could be big.

15:12And the question is, how long does it take for Air Canada to resume and get back to the full operation? Because it's not just a flight center sits concert during this three days, but it's also how long does it take to resume and return to a normal operation, knowing that we are not even sure when flight attendants will go back to work. So that's a big question. And then, obviously, the impact, the lasting impact on bookings, fares, and the brand name that the strike could have through the rest of the year. Because when this kind of event happens, you usually end up having to discount a little bit fares to lure customers back to your flight.

15:58So there is also those questions, but that's the kind of amount that we see for this quarter. And just to give a little bit also of context, this happens at a time where Canada is hit by the US trade disputes that not only impacts GDP, but also impact the travel patterns. And Air Canada was definitely facing big headwings because of this and had to reallocate seats from the U.S. to somewhere else. And that had an additional impact on yields during 2Q and likely 3Q. Air Canada, how's the market share shake out in Canada? oh in canada they have uh almost 50 percent of the market in terms of capacity between 45 and 50 depending on the market depending on the quarter but it's very significant and then you have a second uh competitor west jet which has about 30 so you you have a very two strong airlines in canada that have a sizable share all right francois canadians this winter when it gets cold You're telling me they're not going to fly down to Arizona and Florida?

17:14Probably less. At least Air Canada cut travel to the U.S. They cut 8 % in 2Q. They were likely to do the same through the end of the year. That's the only way in order to make sure that yield remained kind of stable. They managed this in 2Q. The hope was to do it again in 3Q and 4Q. We'll see if that can happen and we'll see what kind of deal flight attendants can get during the negotiation, because that's also some things that the market will be looking at. Stay with us. More from Bloomberg Intelligence coming up after this. Our hometown is not a test tube. 90 miles northeast of Nashville, a battle for the future of America plays out in one small town.

18:05Developers with right wing ties have purchased hundreds of acres of land. We need cities on a shining hill. This is Our Town, a podcast about what happens when a small town becomes the site of a social experiment and fights back. Guess you didn't move in on a bunch of dumb hillbillies now, did you? Listen to Our Town on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

18:32You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts. Or watch us live on YouTube. Let's switch to tech. Like, when I go to vacation, I go to, like, the Jersey Shore. Mandeep Singh, no. The dude picks Calgary, like, in Canada. Like, who does that? I mean, I love skiing out there. So, I don't know. Maybe he knows something we've done. It's beautiful out there. I get it. Mandeep Singh, Bloomberg Intelligence Senior Tech Analyst. Mandeep, here's the story I want to get to.

19:09Back in my day, if you were in a public startup company and your stock was all tied up in a private company, you had to wait for an IPO. Then you had to wait for the six-month lockup. Then you could begin starting selling. That's not the case today. The people in open AI, they're selling about$6 billion in stock here. This is becoming more and more common, isn't it, for your tech companies? It is. And I think Meta exacerbated that trend by, you know, the acquihires they've made in the last two, three months. I mean, there are startups that have just disappeared without an outright acquisition because Meta acquired their top five people or top 10 people.

19:48And look, when you have that sort of risk of losing talent, you got to find ways to, you know, liquidate your stuff. the stock that you have in your company. And for OpenAI, I mean, talent is paramount. This is a company that may end up doing, you know, almost a$20 billion revenue run rate by the end of this year. And the same thing for Anthropic. Anthropic started off the year at a billion dollar run rate. Now they are at a$5 billion run rate. When you 5x your revenue like that, you have to find ways to, you know, keep your employees happy and retain them. And I think this is their way of making sure the employees can liquidate some of their stock.

20:33So is this a perk for all OpenAI employees? I mean, do you have to be there a certain amount of time or can anyone take part in this? I mean, we don't know that level of detail, but suffice to say, I think they've allocated a certain amount. And the private valuation of this company has gone from almost$250 to$300 billion to$500 billion now. And so clearly, there is a lot of appetite for a company like OpenAI, which is at the frontier of everything that's going on in generative AI. And, you know, there are buyers of that kind of stuff. I got to satisfy the banker gene in me. Is there an open AI IPO at some point?

21:21Probably they will. And my hunch is, you know, when you are a category leader in any sort of technology trend, you want to be a public company because, one, it clearly helps you get more, you know, long-term investors for your stock. And also, it's great PR. So I can't imagine, you know, an open AI staying private for very long. With that being said, you know, their financials don't look great. I mean, from what we know, they're burning a lot of cash right now. So it's not a very profitable business model, but the top line growth is really what is getting them all the attention right now. So they will have to clean up that OPEX side if they plan to go public.

22:15So I don't think it's imminent in the near term, but I would be surprised if it happens in the next two years. Hey, Mandip, in the last minute we have here left, does this put, you know, OpenAI as the world's most valuable startup? I mean, does it push it past SpaceX? Is it sustainable? By far. And look, the top line growth, as I said, both for OpenAI and Tropic, this is not something we see very often. So at their revenue base, I mean, they are clearly the most coveted and the most talked about name. And that's going to be the case for a while. So, Mandy, what skill is the AI skill? Like, what are these people acquiring in these aqua hires when they're paying out these big packages?

22:58What's the, is it coding? Is it just engineering 505? What is it? So, right now, when you think about how GPT-4 and 5 became smarter and smarter, it's about, you know, engineers who can help these models become smarter and smarter in terms of answering more questions, doing more types of things. And that requires a certain knowledge of probabilities, statistics, tokenization, that, you know, the way large angle models are built, there is a neural aspect to it. And that refinement of LLM is what is making them more intelligent. So you need to have that basic level understanding of tokenization and what are the tokens that makes these LLMs smarter and smarter.

23:43And I think that's why they deserve to get all the attention.

24:15The Big Take podcast from Bloomberg News keeps you on top of the biggest stories of the day. My fellow Americans, this is Liberation Day. Stories that move markets. Chair Powell opened the door to this first interest rate cut. Impact politics. Change businesses. This is a really stunning development for the AI world and how you think about your bottom line. Listen to The Big Take from Bloomberg News every weekday afternoon on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.