Lots More on What's Hot at JPM's Health Conference

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1:01at chase.com forward slash business card. Chase for business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank and a member FDIC. How's San Francisco? It's great. You know, like I think that a lot of people told me it was going to be a dystopian hellscape and it's not that bad. Wait, it's the first time you've actually gone, right, to the JPMorgan Healthcare Conference? To this one, yeah, this specific conference. And what's your first impression of it, I guess? Is there anything that surprised you? I guess what really surprised me was the security.

1:38Like I've been to conferences before where it's kind of like, you can't even go into the hotel without like your pass and they're really strict about it. So I guess that was the most surprising thing. But other than that, it's, you know, the meetings are cool, the conferences, it's still a conference, right? Like it's not, I'm not gonna be like, Oh, God, this is, you know, the coolest thing I've ever seen in my life. Although that did kind of happen here with there was a company that was presenting that has, I guess, like you can call it like drug GPT, right? It's like artificial intelligence, but used to like find new drugs.

2:09And that was really cool. I did a deadlift. One, two, three. Hegemony. Okay, good. Hegemony. Barges. This is an after school special, except... I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the U.S.? Where's the best squid ink pasta? These are the important questions. Is it robots taking over the world? No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. And people will say, I don't really need to listen to Joe and Tracy anymore. We do have... Cha-ching! The perfect guest.

2:48You're listening to Lots More, where we catch up with friends about what's going on right now. Because even when Odd Lots is over, There's always lots more. And we really do have the perfect guest. We're talking to James Van Geelen of citriniresearch.com, also known as Citrini on Twitter. You might remember him. We had him on All Thoughts back in August to talk about weight loss drugs, including Ozempic and how they were going to change everything. That was kind of a prescient conversation, I think, because since then, we've seen even more excitement for a lot of these drugs. and the stocks have taken off even more.

3:25James, is that what everyone's talking about at that conference? I think it's split kind of 50-50 between the GLP-1 drugs and then the ADC cancer stuff because of the cytokinetics acquisition that was announced. I don't like going to conferences typically. You know, every once in a while, they're okay. But what is like, I know like the JP Morgan Healthcare Conference, I know it's a big deal. Why is it such a big deal? What is it exactly? And like why this one in particular, how did it become like such an important event for healthcare investors? I don't know the history of the conference, but when you look at the agenda of who's speaking here, it's, you know, everyone that's a big deal, everyone that you would want to know what they're doing, they're kind of here.

4:07I think that there's even more value in just sitting in some of the hotel bars, like hearing how people are talking, you know, like people seem pretty optimistic on like med tech in the funding environment. And that's almost more valuable to me than the conference itself. So by the way, we're recording this January 10th, Novo Nordisk hitting yet another all-time high right now. It's kind of crazy, Tracy, for all of the hype about the GLP-1 drugs, A, the stocks keep going higher. And B, I feel like every day there's some other article or thing about here's another thing that they do well or another area that we're researching that shows promise where it's not just about weight loss, like compulsion or other things.

4:52It's pretty wild how this is not slowing down. This is my opportunity to reject the idea of the odd lot's curse and that we top tick a lot of these things. We did not top tick Novo Nordisk stock, okay? There's a bunch that we haven't top ticked. Yeah. Actually, when I got the invite to come back, I remember everyone that was like, if you go on a podcast and you talk about this trend, like that's it it's over you know so when i got the invite to come back i went and i looked at like lily and novo and uh so i think it's like 81 of the time they have been at all-time highs since yeah since that so i think we can put the odd loss curse rumor to we're not trying to time the market we're not here to make recommendations but we are just trying to establish that not every time we talk about a trend, it's at the top.

5:44And I'll just say the other one, we've done multiple episodes over the years, over the last year, relating to NVIDIA and semiconductors, and Tracy, NVIDIA at another all-time high today. So we're just getting these on the record. We're just journalists who want to be timely. We're just journalists who want to be, we just want to be timely. Okay, so within the GLP-1 world, what's hot? What are people talking about? What's interesting within GLP-1s? Well, there's two main things, right? You got the oral drugs and like Lily's CEO had a fireside chat type thing. And I have this big realization. I don't know if this was like common knowledge among people that are healthcare specialists, but I had a big realization that basically with these oral drugs, it's not so much about the fact that like patients don't want to use these auto injectors, because as we've seen, people are pretty much fine with the auto injectors the thing is the auto injectors are super expensive and like very by constraint so it's kind of like the oral drug right like it's very easy to make a pill right and the eye chain is like not the same as the auto injector so it turns out the way that he was speaking it really gave me the idea that like these oral drugs right like lily has orf and novo has one too that's in the in the works and they seem to be kind of like the rate limiter right he had something that he said about how he sees supply for these drugs being a constraint for you know the next 10 years and then he said that's not a bad thing right because we have you know half of we have i don't know 500 000 people in the u.s that are on these drugs and 110 million people that theoretically could or should take them.

7:32And that doesn't even count in Brazil or China or India, right? That's the main thing. So one of the things that lives rent-free in my head ever since we first spoke to you was Titan Stapler. Do you remember that? Like this company that makes Titan stomach staplers. And I'm wondering, you know, obviously people are talking about the sort of positive impact of weight loss drugs, GLP-1, on their bottom lines. But is there anyone at the conference that you've heard or seen talking about negative impact? Honestly, I think that ever since right around the first time we spoke, there was a wave of some people that fell on the sword, so to speak, kind of like how Chegg did with artificial intelligence.

8:18I think that once they saw the stock reactions, once you come out and you say, you know, GLP-1 drugs are killing us, and then your stock goes down 10 % a day. I think they're a little more careful about it now. They're not readily offering that information. But also at the same time, obviously I had a very high conviction thesis on the idea that CPAP machines and the Titan stapler and all these things would be affected. But it got so priced in so quickly. And some of that was not GLP-1 stuff, right? Some of that was basically just rates. like don't attribute to GLP-1s, but you can attribute to interest rates, I guess.

8:59And so I think with MedTech where it is, it's kind of even with the impact there, they can kind of say, OK, you know, but it's a little bit better than you feared. ResMed, a big maker of CPAP machines, that's bounced a little bit over the last few months, still down from where it was a year ago. You know, I was walking back to the office from lunch today and i saw a sign for weight watchers about like get on their glp1 program so obviously they're trying to like pivot to being a glp1 player show how they can fit in but uh that stock not doing so well it's uh down quite yeah just in the last three months yeah round trip went up like 150 percent then went all the way down and the thing if you're in the glp1 space at all and Eli Lilly starts doing what you're doing, it's not great.

9:49Tracy, I feel like investors, you know, they love to get cute with things like, oh, I miss the Eli Lilly trade. I'm going to buy this other company. And then you see like, you know, NVIDIA is the winner. It has so far been the winner. Novo is the winner, Lily. And then all these other like secondary tertiary plays, it's like kind of dicier. Yeah. James, you mentioned something else that I think is kind of like a big factor here, which is just interest rates and the move we've seen there. And you mentioned everyone being sort of enthusiastic about funding availability for pharma going into 2024.

10:18How much is some of this excitement just a pure rates play on the cost of funding for, you know, these companies that spend a lot of money on research and development actually coming down? I think it's like a rate of change thing, right? It got so bad that even an incremental improvement is going to be met with overwhelming kind of enthusiasm, enthusiasm, because the regional bank stuff, you know, Silicon Valley Bank collapsing hurt the biopharm and biotech industry significantly. And I think that it's kind of been so long where rates were just going up and everything's going to stay higher for longer.

10:54And now, you know, there's a glimmer of hope on the horizon. And it's very easy if you're in this industry and you've just been hearing no for the past year and a half to say, oh, finally.

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12:33Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Paid for by Public Investing. All investing involves the risk of loss, including loss of principal. Brokered services for U.S.-listed registered securities, options, and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA and SIPC. Crypto trading provided by XeroHash. Complete disclosures available at public.com slash disclosures. Wait, can we go back? I think you said there were like two things in the GLP-1 space. You mentioned auto injectors.

13:05And so I was curious what the other one was. The other thing is that we're kind of finding out, or I guess we already knew, but the thing with the GLP-1 drugs is that they will make you lose weight, right? And if you are morbidly obese, that's great. Now, the problem is you are going to lose some muscle too, right? When you say you lose weight, it's not necessarily that all that weight is fat. And that can be a problem just because kind of common sense, right? It's better to have muscle mass. Muscle mass is great, especially if you're diabetic and also from like a cosmetic aesthetics perspective.

13:43So now kind of the thing that everyone is focusing on is finding a combination drug to be used alongside these GLP wands that makes it so that you either do not lose muscle when you are losing fat or that you actually gain muscle. So there was some data from Regeneron that was, in my opinion, just like everything else that happens, very bullish for Lilly. They had an acquisition. They bought Versanus for$4 billion. And Versanus has a drug called the Migramab. And when you combine the Migramab with, you know, semaglutide or another GLP-1 drug, the phase one trial was showing that you will lose 12 % of your body weight, but you will also increase your lean muscle mass by 6%, which is a cheat code, right?

14:31Like there is nobody doesn't want to lose 10 % of their body weight and then also gain lean muscle mass. It's also important with like the elderly population, you know, because they, if they get weaker, then they're more at risk for falls or injuries and, you know, making sure that like bone mineral density stays high. So, you know, but at the same time, it's also if you make this drug, that seems like a money printer to me. Well, also, I think muscle building drugs already exist in the form of anabolic steroids, although I doubt anyone's recommending that you go on a Zempic and then take steroids as well.

15:05But James, you mentioned at the very beginning of this conversation that you saw something cool and you sent me a little video of this. And when you sent me the video, I had a sort of realization that we are truly in the future in some respects, because you sent me a video of a presentation of basically like an AI for drug development. So drug GPT, and you recorded the video using your meta sunglasses. I am speaking to you guys right now on them. It was definitely future coded for sure. I mean, the thing was, this was Recursion Pharma's presentation. And theirs was at, you know, 7.15 in the morning.

15:44So it wasn't very crowded. And then NVIDIA presented later. But Recursion was the one that had the demo. They did it right in front of you. It's like if you loaded up ChatGPT and started asking questions, but they were, it's called low. I call it drug GPT just because it's funny. But they opened up this program and then started, they said, you know, give us a list of molecules that are going to target RAF1 or and it just gave him 50 new drugs and then they can refine it down based on how likely it is to have this side effect or that side effect or what the structure activity relationship is or you know the dose response curve just based on you know this predictive AI and uh how do we know it works well I mean how do we know that the program yeah I mean like so So like they like they give you some molecules and stuff.

16:35But like, how does anyone know that ultimately this is where does it go from there? What's the evidence that this is, you know, produces drugs or finds new combinations of molecules faster than traditional routes? well i when he was doing it yeah kind of in the audience you have to assume that there are some people that know biochemistry pretty well and they got into some stuff that you know i couldn't really follow but he was talking about how oh you know if there are any chemists in the audience you'll recognize this drug looks a lot like this drug and and basically they went through the whole i mean the thing is i dropped out of med school right so like i could follow for a very limited amount of time.

17:15But I think the main point that they were getting across was that in biotech and biopharma, they spend so much time and money on things that might just not work. And if you have a program that can basically make you faster to fail, right, where you're kind of figuring out what's going to be a waste of time and what might not be more effectively, that that's huge, right? Maybe it's not that this is going to find the cure for cancer, but the company that, you know, eventually does find the cure for cancer, they're going to be a lot more efficient with it because they're not going to be wasting their time on stuff that, you know, maybe this program can tell them obviously won't work.

17:54How often are people mentioning AI in general at that conference? I'm curious if it's sort of like infiltrating to the degree that it seems to be in financials conferences, for instance. Oh, yeah, it was a ton. I mean, you know, Lily didn't mention AI. Novo didn't mention AI. They have their own thing. But then, you know, you had Sanofi, Amgen, both talking about their new AI platforms. And NVIDIA was here, right? NVIDIA presented here and had a whole thing about their predictive analytics platform and Ioneemo. And it was, I mean, you guys should have seen when the presenter from NVIDIA concluded her speech.

18:32It was like night of the walking dead. literally the entire audience just like shambling up like just trying to get a little bit of the nvidia magic and speak oh that's always the most awkward moment at conferences when the speakers get off stage and everyone kind of like awkwardly stands around waiting for their chance to introduce themselves and network hand them a card tell them about their company yes uh totally yeah i was worried it was going to get violent you know and like the other thing the ratios at these conferences like finance conferences, not great. And like, this is like a woman with 90 men and two women just descending.

19:09It was like not the coolest scene. By the way, Tracy, you know what stock is at basically the same level it was 10 years ago? I have no idea. Pfizer. That's one company that my understanding is not in the game at all on GLP-1s. Of course, it went nuts in 2021. The hot thing was COVID injections. But obviously, I think many fewer people these days are getting boosters than people may have expected two years ago. And that stock is literally where it was. No, maybe it's paid dividends and stuff since then. That stock is literally where it was in 2014. So don't miss the GLP-1 vote. Pfizer had an oral GLP-1 and, you know, ditched it.

19:51The side effects were just too bad. And that's going to be like a serious risk to look out for, right? Because, you know, with the oral preparations of these like peptides or like any really like endocrine drug, there's always, it seems at least, you know, I don't have science to back this up, but it seems like when you have an endocrine drug and you're trying to turn it into an oral instead of, you know, an injectable, the side effects get really crazy. And that's definitely, I think the biggest risk to like Lily Novo would be one of them gets the oral and the other one has side effects that are way too bad, right?

20:25Because like I said in the beginning, right, that the oral drug will make it so that they can take advantage of this huge demand, right? They're constrained by supply, but the supply of the oral drug would, you know, kind of alleviate that. And if one of them has it and the other one doesn't, that could really change the landscape. So James, in addition to bringing us dispatches from the JPM healthcare conference and being our sort of eyes on the ground, our sunglasses on the ground, maybe, what else are you going to do in San Francisco? Like, who are you talking to while you're there? Oh, you know, I messaged all the people that I know that have a kind of venture capital healthcare vibe.

21:04And I'm not really super involved. Like, I just trade and I'm in my own office and trading and I'm not super linked up with all the finance people. So I didn't get invited to any of the events or anything. But I can still have a good time in San Francisco myself. James, I think that's it. Oh, yeah. Go ahead. I just want to say, Joe, wow, you are a really good musician. Finally. Finally a little respect around here. No, I appreciate that. I met James in person at our concert in December. very kind of you to say on air thank you so much i was surprised i was i kind of expected it was a joke but you are very very nice of you to say great let's leave it here this is a great place to end it on this note i love let's leave it here that's a great place to end he kind of broke up there at the end i don't know if we got that on audio i think we did i heard it i heard it

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