Down Day For Drugmakers… And Intel Jumps On Deal Rumors 1/17/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money. Here's what's on tap tonight. Shedding pounds and not in a good way. Shares of Novo Nordisk seeing their lowest levels in nearly 18 months. The headlines that keep sending the weight loss heavyweight lower and lower. And a Bitcoin breakout. Prices trading near all-time highs as President-elect Trump promises to make crypto a priority. What that means for regulation and the next steps for the space. Plus, could Intel be a takeover target this year? Just how much climate change has affected homeowners insurance.

0:32And the last two traders revealed their 2025 25 acronyms, why Steve is putting on his gloves and Courtney's going global. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ on the desk tonight. Zeke Rosso, Karen Feinerman, Courtney Garcia, and RBC's head of U.S. equity strategy, Lori Calvacina. And we start off with the latest drag on drug makers, Novo Nordisk, getting slammed after the Centers for Medicare and Medicaid published its list of 15 drugs subject to price negotiations for 2027, including Novo's GLP-1 drugs, Ozempic and Wegovi. That stock fell over 5 % today, now trading at lows last seen in the summer of 2023.

1:08Eli Lilly shares falling in sympathy and broader concerns over pricing pressures in the GLP-1 category. Shares were down more than 4%, bringing its losses since Monday to 9%. The company also trimmed 2025 guidance earlier in the week. And another wrinkle for Novo, the company out with top-line results of a trial that studied a higher dose of Wegovi than is currently on the market. Patients losing an average 20.7 percent of their body weight after 72 weeks. That's still, though, slightly less than what patients see on existing doses of Eli Lilly Zep bound. So what does this all mean for the direction of the obesity trade, which has really come back down to earth for a bit, Karen?

1:47Yeah, well down, obviously, right? And so for Novo, I mean, just looking at where Novo has been in the last, I don't know, five months or so, it's down almost half, which is if it weren't so big, it would be a takeover target for somebody. But it is still like, I don't know,$350 billion or so. I mean, this is bad. I am long Lily. It's clearly has, you know, you can't help but think, all right, well, if that's happening to Novo, you got to think that Lily's going to suffer some of that pressure as well. I'm still long. That hasn't been the right place to be in the last two months. But I really believe in this trade and this drug, the promise of this drug.

2:26And even if there is, I'm sort of hopeful that it will get covered much more broadly than we think. So they'll make it up on volume effectively. Yes, although I don't know that it works exactly that way. It's not like, oh, if you're on the list, then we'll cover it. But I do think that there's a chance that we see much broader coverage. Aren't we going to see a whole new negotiating team once Trump's team comes in? Do you think they're going to be easier on Novo Nordisk? They're going to say, oh, you know, Novo Nordisk, we don't want to cut you that much. You know, we have lots of people on this drug who want to pay.

2:58Let them pay a little more. Does that sound like something they're going to do? I know that. When I put it that way, no. I sense that you're being sarcastic. So I think that we're going to go with whatever the lobbyists in big pharma kind of. That's unfortunately the way our government works. So, you know, and I think everyone likes to leave their own fingerprint. If he thinks that this is a better deal to do better. historically when they do these negotiations, the drug price comes in 22%. What does that do? So if you do some analysis and you go through, read the tea leaves, it's probably a 10 % discount on Inovo.

3:35When you look at it down 26 % for the year, these are the names that we've talked about so much. They've been so prevalent and they've been these high flyers. It's down 26 % for the year. Another 10 % is probably not going to squeeze people out of it. That's probably your worst case scenario for me. So down another 10 percent is your worst case scenario or in this stock. I think the worst case in everything that we know right now. And I think you have the upshot of Trump's team being less onerous on these negotiations. What do you think? Yeah, that is the big unknown is what is the new administration going to do with these price negotiations?

4:15But I think realistically, many analysts knew that they were going to be in this list of companies that were up for these price drops. Exactly. Which is why I think probably a lot of this more so is because of the trial that just came out, probably more so than the price increases. But I think even if there is that price pressure, the question is, will there be increased volume for the demand in these drugs? And I think that's what we're continuing to see is the demand is there. They're really still not even able to supply it enough to get it out to people. And I would still say that outweighs these price pressures that, yes, I would buy on these dips here.

4:46I would, you know, I don't know how much further would take to go, but I think I would look at this as a long-term opportunity. So I would just say zooming out, I was on the road pretty much the entire month of December, and I got an earful. Well, no, but I got an earful from investors who were worried about the market, itching to go defensive, and they were talking about just about any other sector besides health care, and the reason why was the political uncertainty. And even looking at an area like pharma, where, you know, we had been seeing some good earnings revisions, looked at the sector broadly, you'd seen some good valuation appeal.

5:16Maybe there was an idea there was a little bit less risk in that sector than other areas. I feel like this is a sector that just cannot catch a break. And going into a political environment where we don't know what we're going to get, I think it's tough to step in. I think it's interesting that you think the Trump administration is going to be a little bit easier on these guys. I mean, Trump is the dealmaker, right? I mean, he's the dealmaker in chief. And it's a very populous thing to bring prices of drugs down, particularly very popular drugs. He also likes being contrarian. So if he sees where where people are lining up, he more often than not will choose how to convince himself of the opposite opposing side.

5:56And the only time we didn't see that with him was with U.S. Steel. He stayed right in line with the Biden administration because of unions and because of Teamsters and because of whatever else, I would assume, I think you're going to see sort of a pivot here. And I get everything that you're saying makes total sense. And on paper, it should be, he should be worse than the average of 22%, you know, fighting with the drug companies. But I think he's going to play it from a different angle. So he'll see it as a win. Do you think it's a value now? I mean, are you value? Well, I mean, I guess, you know, it's lower, that's for sure.

6:34But I do think that, yes, I do think it's I mean, for this kind of extraordinary product, how many of these have we seen? Maybe, I mean, I'm trying to think back since, I don't know, statins were gigantic, absolutely gigantic for a really long time. So this is bigger than that. So, yes. Let's get more on all this with Dr. Kavita Patel. She's an NBC News and MSNBC medical contributor. Dr. Patel, great to have you with us. You know, what's interesting about Novo, it's got, like, a lot of things going on here. It has the Medicare, you know, the drug negotiation aspect, which could put pressure on pricing.

7:11But it also has the STEP trial results, which were which seemed disappointing because it just they weren't as it wasn't as effective as as its competitors at bound. And it's coming off of the disappointment of Cagrissima. So what do you think in this world of Novo Nordisk is its its biggest burden at this point? Yeah, I think the biggest burden is what, by the way, the interesting thing about that drug list is that it not just had, you know, Ozempic, Lugovian, Rabilsis, but it basically drugs that came out at different years kind of lumped them in for class effect, which I know Novo has, you know, their suits pending, all sorts of things.

7:45But I think that's the biggest risk right there. When you look at the Medicare population and then the reach this could have, as well as the impact on the commercial market for Novo, this is a big deal kind of watching how these drug price negotiations shake out. and listening to how you all spoke before, you know, we're hearing Trump want to resurrect things like most favored nation. Melissa, that puts us into an even deeper conversation about deeper price discounts, not necessarily going easier on the industry. So I think that's the largest risk combined with, I feel like a broken record when I say I'm waiting for the Red of True Tide, you know, kind of commercial launch, because if you think there's Zepetide and Zepbounder better than Ozempic and the Step Up True trial and Wagovi.

8:25You look at three mechanisms of action in Reddit True Tide, and then you've got, you know, now we're talking about some incredible results that could put Novo in. I still think there's a market, but it just changes the dynamics of that market. Dr. Patel, it's Karen. Thanks for being on. If you're Lilly, how do you think about pricing now, today versus yesterday? Yeah, it's a great question. So all we have is to kind a look at what happened for drugs that were in the list that still has not taken effect, but that original list of 10 for the IRA drug price negotiations. Remember, just to remind people, it goes into effect in January of 26.

9:04But there we saw kind of a spread, you know, 38 to 79 percent reductions. And I think that's where if you're Lilly, you're looking closely and just kind of trying to think through, well, if Trump comes in with kind of a most favored nation approach, then you're really hoping, and as the Lilly CEO has said, that that might result in other countries raising their prices so that overall, U.S. prices are not much lower. But you're probably trying to do that calculus right now, depending on what you're hearing from Trump. And keep in mind, I think there's still so many uncertainties in how this administration, the incoming administration would take action.

9:39But I was reminded again by staff who are career staff that they're the ones that are in the negotiation room. So there's a lot of political overlay. And certainly the Trump administration can do things, but they're still going to have a lot more control at the career staff level. So Lilly should just look to kind of how the negotiations fared last year and trying to handicap, well, where and how will we fare when we inevitably come into this market and position ourselves? I think they're doing that with these really interesting relationships on the telehealth side, looking at their vials. I think they're trying to think about multiple prongs to get to so many people and to overcome that employer resistance to cover these drugs at the large group market.

10:21You mentioned that most favored nation status could mean even deeper cuts. By law, the price cuts should be 25 to 60 percent off of the regular price. So you're talking about cuts that could potentially be deeper than that margin? So this is where the question is kind of the interpretation of the statute, because if you read the statute closely, there's wiggle room in how you can interpret kind of the mechanism of that negotiation and the prices to which it's indexed. So yes, you're right. Statute tried to set out kind of a corridor of safety, just like it did with like how long the drug has to be in the market and some of the other restrictions on it.

11:00But Melissa, if you go a layer deeper, and the Trump administration has, keep in mind, this isn't the first time they've talked about most favored nations. So I think there's really like some opportunity there. And I think that's going to be the active point of discussion once they come in. And I certainly do not expect for them to just kind of, they can't undo that list. That list is going to stay as it is. It's very difficult to do it without congressional action. And this is not the kind of thing you want to take congressional action on. I see them actually just digging in deeper and trying to think about what these prescription drug prices could look like.

11:35You know, Elon Musk's tweet several weeks ago, I believe, with how he thought this could open up an incredible market if people had more access to it. That seems to be in line with kind of where people feel and the public feels that way too. So for Novo Nordisk, it has this going on. Kagris was a little bit of a disappointment. And it's also got the semaglutide patent coming up for expiration in a few years' time. With that backdrop, Eli Lilly is working on Red at True Tide, which could be, as you mentioned, a game changer in terms of efficacy. How much better do you think Eli Lilly is positioned now, seeing what the Novo portfolio is, the pipeline, versus before?

12:16Yeah, I think Lilly, and again, we've kind of spoken, Melissa, about not just in this kind of space, but in some of their just like bets and chronic disease in general. I think Lilly is positioned very nicely. Having said that, I think that there's so many aspects of, you know, there's so many incretins, there's so many drugs kind of in pipeline that I think could offer even not just a good profile, but easier dosing. So we've always talked about orals. They're just not as good right now as the injectable. But with time, you would imagine that there's just going to be sophistication in the delivery mechanism.

12:50So I think Eli Lilly still has just an incredible like kind of land grab for this space and this space being chronic disease effects of obesity and all the chronic conditions around it. We've already talked about watching closely some of the Lilly trials in other indications that keeps them, you know, that puts them in, again, this great position for being part of like eliminating chronic disease. Think about going from chronic to curative. And when you look at the Lilly pipeline, that's what it speaks to. Wow. Dr. Patel, always great to see you. Thank you. Thank you. Have a great weekend. Meantime, just a few days to go before President-elect Donald Trump is sworn into office for his new term.

13:24He has promised to make crypto a priority in his administration, Bitcoin trading securely over 100K, close to record highs. CNBC's Mackenzie Cigalos joins us now for more on what we can expect under Trump 2.0. They're celebrating in Washington, Mackenzie. I mean, they're going to have a crypto ball for him, right, a party for Donald Trump. Bitcoin's already run so much. So what are we expecting the first, I don't know, 100 days from the Trump administration in terms of the Bitcoin industry? Yeah, the first ever crypto inaugural ball is tonight. It's closed to the press, but I will be there and I will report back on how that goes.

13:55There are multiple reports that we're going to see an executive order that's crypto specific on day one in office. I've been talking to a lot of industry specialists who've been putting together a plan over the last several months, channeling that to the Trump transition team. some of the big pillars of this type of plan involve a crypto advisory council. So essentially, a lot of the C-suite executive members of different crypto firms who went to roundtables with President Trump in the run-up to the election in Nashville and Mar-a-Lago, they were told that this would be the pool of candidates from which he would form this advisory council.

14:27And this would be separate to that AI and crypto task force that has been convened under David Sachs. Now, separately, there's also talk that they might look to. there have been more than 100 enforcement actions brought against crypto firms over the last four years. And one of the potential proposals here that could be a part of an EO would be to freeze these enforcement actions if they don't involve allegations of fraud. So right now you've got Coinbase, Ripple, Robinhood received a Wells notice from the SEC. And so if you see some of these enforcement actions frozen, that could be a game changer.

15:03Robinhood and Coinbase both ending up 5%. And then the big one, Melissa, is the fact that we might see a national Bitcoin stockpile. This is something that Trump first introduced the idea of in July in Nashville. What's interesting is that over the last few months, we've seen a lot of executives from the crypto industry meet with Trump behind closed doors to advocate for other cryptocurrencies to be a part of this. You have Brad Garlinghouse, the CEO of Ripple, which is closely aligned with the XRP token, advocating for just that. So in terms of a crypto stockpile, presumably it would be under the purview of the Treasury Department.

15:39Has Besant said anything about it? So at this point, all that's been mentioned is that the$20 billion worth of Bitcoin that already sits on the government's balance sheet under the purview of the marshals would potentially be migrated to this stockpile and be under the purview of the Treasury. We haven't heard whether or not that's going to happen. you've got names like Senator Lummis of Wyoming, who's been actively advocating for a more aggressive buying plan. One million Bitcoin over the next five years. She's been meeting with members of the Trump transition team and some of his cabinet appointees reportedly to discuss that plan and making that a reality.

16:13But at this point, we're still waiting to see if this strategic Bitcoin reserve would be a part of an executive order if it's brought next week. Mackenzie, thank you. Have fun at the ball. Should be interesting. Mackenzie Sigalos. An advisory council made up of industry executives. So that sounds like a great idea. Karen. Yes. So I was just looking at the end of 2024, the U.S. had$489 billion worth of gold. And what was it,$20,$10 billion of Bitcoin, did you say? 20. Yeah. So, I mean, there's a lot of room between here and there. That will be fascinating. I think if that's the case, I do think there's still more ups in here.

16:54Clearly, Bitcoin is excited about this and there's something built in here already. Right. But if that is the case, I think there's more to go. You know, the saying you can never be long enough Bitcoin when it's going up. Right. And that's what people are going to chase. So they're either going to try to capture 200000 Bitcoin per year or up to, as she just said, a million Bitcoin per year. Either way, you're only going to have a maximum of 21 million Bitcoin. It's the supply demand that keeps the bid within this. I have an outsized bet in Bitcoin. I think it goes much higher. How many questions do you get, Lori, about Bitcoin versus equities?

17:32You know, it doesn't come up as much as you would think. We have another in-house expert on it that ends up taking most of the questions. But we do have one chart in our weekly where we actually track Bitcoin against the S &P. And most of the time, that relationship has been pretty solid. It breaks down every now and then. we're right back into a pattern where they are marching right together. And the other thing we see is that if you look at Trump's net approval, it's also marching in line with the S &P. I haven't done the Trump versus Bitcoin chart yet. I guess I think I know what I'll find out there.

18:03But these things are all starting to be interconnected. And at the end of the day, I tend to use it as a risk barometer. We'll continue to use it that way. All right. But now that's great news for the equity markets then, Gord. Yeah. And I would agree that I think this is a risk on bet. And I think this This is part of the Trump trade, which has come back in focus again as we're getting closer to inauguration day, because as we got into December, inflation and the Fed kind of took control of the market macro conversation. And now we're looking at what's going to benefit under Trump presidency, who has by far been the most favorable to cryptocurrency.

18:32So this isn't something we invest in, but I can tell you it's probably the most common question we are getting from clients. It's like, do we own this? Should we own this? How much should I own of this? Like it is like from a retail level, like more and more people are getting interested in this, which to Steve's point, the demand probably is there. Coming up, a big week for the big banks. We'll dive into what strong earnings and a slew of fresh record highs means for this group next. Plus, Chinese stocks soaring on the back of bullish GDP data is now the time to jump into this trade. We'll debate right after this.

19:02This is Fast Money with Melissa Lee, right here on CNBC.

19:15Welcome back to Fast Money. J.P. Morgan, Goldman Sachs, and Morgan Stanley among the names trading at fresh records today. The stocks, just some of the marquee banks beating earnings estimates this week alongside Wells Fargo City and Bank of America. BNY Discover Financial in American Express also hitting new highs today. Everything about this environment is great for financials, Karen. It really is. I mean, on every front, you had net interest income, which was great. You had other income, which is great. You had banking. You had asset and wealth management. You even had growth and loans. I mean, and you're in that capital, potentially more capital.

19:48They might be able to release some capital and a great environment overall in the economy. So there's a lot to like there. So we've liked the sector. I do think the investment banks are getting a little pricey, but we've still got really solid earnings revision trends and they probably got a bit more room to run. But look, I think a lot of the, you know, sort of less challenging stuff for markets, the good stuff, so to speak, from the Trump administration, easier regulation, M &A, increased business optimism, all that stuff feels like maybe it hasn't quite happened in a big wave yet, but it's still kindling.

20:20And some of the more challenging things like tariffs just aren't that relevant here. So I think this is still a good sector to be in. I do like the regional banks better than the investment banks, but I think there's still more to be done here. Yeah, Court. Yeah, I think the banks look really attractive here. And I do think coming into a new administration, they're one of the direct beneficiaries of less regulation. You're really seeing a yield curve that's normalizing is really good for them. And I think what's also been really positive to see is their commentary on the consumer has been very positive, where they're saying, well, we're really not seeing cracks in the consumer because consumers are still spending.

20:51So it's good for the banks, but also good for the economy and the markets on a whole. So I've been really happy to see the news that's coming out. This was the original Trump trade. This was the deregulation trade. So if Basel III really gets rejiggered, this should be a tailwind to the banks. For everything that Karen mentioned, everything that the other panelists mentioned, everything that Lori and Courtney said, I think there's a tailwind, but are they sexy enough going forward? Sexy enough meaning are they overpriced right now? Wait, wait, wait. What do you mean? I think they could. When you start talking about price to book, these numbers are starting to get a little bloated for financials.

21:33So they could be overdone. When you're looking for sexy, you think growth, you think technology, you think more efficiencies. I don't know if they have that just yet. Karen's heartbroken. You know what I think when I think of JP Morgan? He's like, it's not sexy. I think it is. There's a lot more Fast Money to come. Here's what's coming up next. A major merger in the chip space? We're pulling back the curtain on the latest buzz lighting up Intel shares and diving into just how big this semi-shakeup could be. But first, China stocks rallying today on strong economic numbers out of the country. But with the potential for tariffs and questions over the future of TikTok, is this market investable again?

22:16We've got answers. Next, you're watching Fast Money, live from the Nasdaq market side in Times Square. We're back right after this.

22:32Welcome back to Fast Money. The Supreme Court upholding a ruling that would force TikTok to shut down in the U.S. on Sunday. But the viral social media app might still live on. President Biden saying he will not enforce a ban before he leaves office. and President-elect Trump saying he will make a decision on the social media platform soon. Meanwhile, Chinese Internet stocks got a bump on the back of strong GDP data out of the country. JD.com up double digits. Alibaba, Baidu and others following suit. China's economy growing by 5 percent in the last quarter, better than estimates. Karen, you got in on the China trade.