Can a GLP-1 Pill Revive Novo Nordisk?

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1:16Welcome to Prof G Markets. I'm Ed Elson. It is January 7th. Let's check in on yesterday's market vitals. The major indices all posted strong gains. The Dow notched its first close above 49 ,000 and the S &P 500 also hit a record closing high. Meanwhile, oil prices gave up Monday's advance and finally gold, silver and copper extended their rallies. Okay, what else is happening? The biggest celebration of consumer tech, the Consumer Electronics Show or CES, kicked off in Las Vegas this week. It is an opportunity for tech companies to showcase their latest innovations. And so far, it is NVIDIA that is dominating the headlines.

2:01NVIDIA's CEO, Jensen Huang, opened the event with an announcement that their most advanced chip yet, the Rubin model, is in full production. He also introduced AI models for autonomous vehicles. He said, quote, the chat GPT moment for physical AI is here, and it appears to be happening fast. because Mercedes-Benz will begin shipping cars with NVIDIA's technology this year. So lots happening at CES. We wanted to get a sense of what else is happening, so we are speaking with someone who is there right now. Alex Heath, author of The Sources newsletter and host of the Access podcast, joins us from Vegas.

2:38Alex, welcome back, and Happy New Year. Happy New Year, Ad. I am doing CS like I always do, which is I try to avoid the show floor as much as possible. but uh i am managing to head over there right after this conversation but i've i've gotten a good lay of the land from the hotel rooms and restaurants where all these meetings are happening which i it's actually like the shadow cs it's this like the second show that happens at all the hotels on the strips that i on the strip that i find to be much more interesting but yeah i've never been to ces for those who like don't know what it is what what is it what's going on over that?

3:15I mean, it started as the place where Apple and all these companies would show off their new hardware and gadgets, right? And then all the tech companies got big and started doing their own events. And I would say in the last decade, especially, it's been more regulated to a lot of companies outside of the US that see it as an opportunity to kind of make a splash here in North America to start the year, and a bunch of smaller startups, and a lot of vaporware, and a lot of blowware, and stuff that will never show up or never see the light of day. But, you know, if you squint, you can see real things.

3:54It just gets increasingly harder to do that every year, is my experience. So, so far, what are the real things that you've seen? We're seeing headlines over here about what nvidia is doing uh specifically their ruben chip and the um the plans with ai enabled cars that's what i'm seeing here in new york what are you seeing what's real at cus right now apparently the nvidia autonomy thing is real i mean they're shipping uh jensen said on stage yesterday uh monday to kick things off that they'll be shipping with Mercedes and Q1 in the US. I'm not sure how big of a pilot that is, actually, but I would say that was the thing that a lot of people were buzzing about around all the cocktail parties in the evening after Jensen's keynote was is NVIDIA going really for Tesla in full self-driving and competing with Elon, who is a one of, if not top three or four biggest NVIDIA customers of GPUs, right?

4:58And the read I got was actually that NVIDIA doesn't see autonomy as a business for itself in its own right, necessarily, right? Because they're open sourcing the underlying model. They're wanting it to be a little bit more of like an Android type approach where they work with a lot of different car manufacturers. I think it's a way for them to get data, which Simpson talked about a lot on stage, and inform the way that they build future chips for their customers. I think they do things like autonomy or robotics not because they see those verticals as a business akin to selling GPUs, but because the more specialized and vertical they go in certain domains, the more they learn.

5:41And it's a flywheel that then informs the way that they develop their bread and butter. And I think that's the thing about them that maybe is not more broadly understood, but I was just hearing from NVIDIA employees and other people in the AV space last night is that they're not actually coming for, you know, Waymo's launch here. And I thought that was pretty interesting. Yeah, that is interesting. And, you know, look at the stock, NVIDIA's stock today, which is basically flat, actually slightly down. And I don't know if that's anything to do with what's been said at CES, probably not. But what we're basically seeing is that they've come out with this pretty big deal news announcement, at least as an observer.

6:25I mean, the video of a Mercedes driving around on NVIDIA's AI seems like a big deal. But the market appears to be either already pricing that in or it's not that interested. Maybe the market understands what I was saying, just that it's not going to be a big business for them. And that it's also early, right? And they are behind Tesla tremendously in terms of the data that FSD has and all of the miles that Teslas have driven, which Elon was quick to jump in and point out on that, I saw, after the keynote. The only other real fun piece of gossip here after day one at CSAT is the timing of that Jensen keynote.

7:04And I don't know if you had to watch the whole thing. It was unusually rushed feeling, unusually. I don't know. There were technical difficulties. He had to stop and start. It wasn't as polished as he normally is. And the rumor here in Vegas is that that whole thing was very hastily thrown together to upstage AMD. His, I believe, cousin, Lisa Su, right? CEO of AMD, who was doing the actual main stage CS keynote later that evening. And so you'll notice, like, NVIDIA wasn't on the official CS stage. They were doing their own thing at the Fontainebleau. And he did the official keynote, I believe, last year to kick things off.

7:44And like, you know, Lisa's doing it this year and AMD's kind of having a moment. She brought out Greg Brockman from OpenAI. And I think they wanted, I think there's still that super competitive dynamic and he wanted to upstage her is the fun gossip out here. Based on what you've seen so far, would you say that there is an overarching theme to the pitches and the presentations that we're seeing right now? I would assume last year it was AI. I'm sure it's still kind of AI this year. Yeah. But if you could sort of describe what the theme is, what are people aligned on? A lot of AI wearables, a lot of like rings that you talk to and leave, you know, voice notes into, AI glasses, display glasses, metas here in a pretty big way, talking about their glasses.

8:33And a lot of robotics, most of which to me looks like vaporware. We're most, you know, it wouldn't be CS without all these, you know, demos of humanoids, like, doing things in kitchens or whatever. And, like, I've seen that so many times that it just kind of, I'm numb to it. And until I start seeing these robots, like, out in the real world, I just don't believe it. And so, there's a lot more of that this year. People seem to, I mean, Jensen was saying this in the keynote. I think he said, like, the chat GPT moment for physical AI is coming. He's been saying that for a while. It does feel like things, because of how good the models are getting, that things are starting to converge.

9:08And maybe we will actually see a real kind of robotics, even humanoid-type moment. I don't know if it's going to be this year. But there's a lot of companies here showing that off, at least the demos of it. The only other big thing, and this is happening when we're recording on Tuesday or later tonight, is Lenovo is here in a very big way, which the number one PC maker in the world. And they've not really had a big CS presence, and they're a pretty low-key company. but, you know, we've got hundreds of millions of devices. And they are taking over the sphere and announcing this big, you know, AI product offering for all of their PCs that chains together a lot of different AIs and partners like Inotion or Perplexity or whatever to create this proactive, more natural language, context-aware AI on your PC.

9:56And so a lot of people focusing on how do we take AI out of the chatbot and actually put it into either your PC your wearable, your car, a robot, and make it a little more useful than just talking to a chatbot. Yeah. Just slightly pivoting here, something that happened while we were gone for break that we haven't been able to cover, which I want to bring up to you now, is this deal between NVIDIA and Grok, this chip startup. NVIDIA bought the company for$20 billion, its biggest purchase ever. Well, they fake bought it. Fake bought it. So that's the other side to this. Yeah. They frame it as a deal, this licensing agreement.

10:36But it looks a lot like an acquisition to me. I guess, please take it away. What is actually going on here? I call these reverse aqua hires, and I'm glad that the name has actually stuck since I coined it about a year and a half ago. But it's the stuff that the big tech players are doing where they take the key talent from a lab, do a non-exclusive IP license for the tech because they don't actually care about the tech, they care about the talent, and leave the kind of flaming husk, if you will, of the thing left behind. And I think Grok's in a little bit of a different spot because they have a pretty fast-growing lucrative cloud AI inference business that they're going to continue to run.

11:14And they've got a ton of GPUs, and I think they'll have a lot of inbound there because there is just still so much demand for that. But yeah, Jonathan Ross, the founder and his kind of core technical team going over to NVIDIA to, you know, from my understanding, address what NVIDIA sees as a huge issue, which is, you know, its GPUs are very good for training. but AI inference, which is running AI in the real world in production, right? So when you prompt ChatGPT that is doing AI inference, they're behind there. Their latency is not very good. There's all these startups like Grok was spinning up to take that market.

11:49And the workloads are moving to inference. They're moving to production. All the things we were just talking about, Lenovo, the robots, that's all inference. And so I think they see that as the next major wave for their business. and Jonathan and the team there will help them fix those issues with latency for inference. But yeah, that deal was super unusual. I mean, I reported in sources it happened in under 10 days. Jensen wired the money early. He wanted it done before the new year, probably for tax reasons or something, or maybe because he was just antsy, I don't know. And went from really not knowing Jonathan, the founder of Grok at all, to doing the deal in a matter of just a few months.

12:27So, Jensen is in founder mode 100%. And when you look at all the cash that NVIDIA has on its balance sheet and the rumors about them looking at other deals, I expect this is just the beginning. I expect they'll keep doing deals. Maybe not$20 billion, but I think they'll keep doing big deals. It's so interesting that we keep seeing this theme. There is exactly, you say, the reverse aqua hire theme. I mean, just thinking back to Microsoft and inflection where the same thing happened. And they have this deal, and then all of the talent goes over to Microsoft, and then what do you know? The founder of Inflection is now the CEO of Microsoft AI.

13:02And I assume something similar is going to happen with Jonathan Ross. Something so interesting that you reported is that he told you that they had no intention of being acquired. He said, I read the quote that you reported. He said to you, quote, we have no intention of being fake acquired or real acquired for that matter. He literally predicted precisely the opposite of what happened. What do you make of that? I mean, I love it. You know, if a founder tells me something like that and I have the ability to remember, that's the thing. I was like, it's harder to remember these days. But when I remember, oh, I had this conversation, they said that, I dig it up.

13:37And yeah, this was over a year ago. You know, it was actually the same day that Google reverse acquired character AI, which was something people have probably forgotten about by now, but was another one of these multi-billion dollar deals. And yeah, I asked him about it in the interview that day. And he was like, yeah, we're not going to be fake acquired. And then, you know what? $20 billion had something different, you know, to say about that. I guess everyone has their price, right? Exactly. It seems like this continues to be the theme where as the founder of an AI company, you're saying, we're going to take over the world.

14:07We're going to take on big tech. We can do it ourselves. And then someone shows up with a ridiculously large bag of money. At which point you kind of shut the fuck up and take the money and you go home. Yeah, I mean, we were talking about all this, you know, AI researcher comp packages over the summer, right, which Meadow was doing. Jonathan, the founder of Grok, is probably considered top three to five greatest minds in the world on chips. He's the only, he invented the TPU at Google. He's invented the Grok chip, and now he's working at NVIDIA. So he's one of the only leaders to have touched all kind of three major chips.

14:42And I think he's, for NVIDIA, that's worth it. Yeah. Just final question before you go. It's a new year, 2026. If you had to make predictions about what we will see in the tech sector, maybe like the technology of the year, it sounds like robotics is getting a lot of attention at CES, but maybe it sounds like you don't believe it's going to really come to fruition. What would be your predictions for technology in 2026? On the hardware side, I think AI wearables, we're only going to keep hearing more about. I think we're getting that here at CES. It's going to start trickling out more. I think we maybe will see a tease from OpenAI, what they've been up to with Johnny Ive maybe by the end of the year.

15:30And yeah, I think Meta will ship stuff. Apple will maybe tease stuff. Snap will release their glasses, the consumer version. I do think that's on the hardware side, that's the biggest thing I'm looking at. And also all these like AI rings and pendants. And that's just everywhere here at CES. And I expect that to only get bigger. Okay. Alex Heath, appreciate your time. Always. Enjoy Vegas. And don't do too much gambling. I know you love, I know you're a gambling man. I'll be at the Pilker Road. Don't get carried away. Yeah, you know me. I love it. Okay. Thanks, Alex. Thank you. After the break, the world's first GLP-1 pill hits the market.

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16:22We're back with Prof G Markets. Novo Nordisk launched the first ever GLP-1 pill this week, marking a new chapter for obesity treatment in the US. The Wegovi pill is available now, and it costs between$149 and$299 per month, which is a fraction of the price of injectables. The company says that the combination of lower pricing and easier dosing could open new possibilities for more than 100 million Americans living with obesity. The stock is up 5 % since that announcement to help us break down what this means. For Novo Nordisk, we're speaking with Jared Holtz, healthcare equity strategist at Mizuho.

17:04Jared, thanks for joining us. Great to be here. Thanks a lot. So this GLP-1 pill has been launched by Novo Nordisk. You can buy it today. Seems like quite a significant development. Let's just start with your initial reactions to this move. Yeah, for sure. I've been keeping a really close eye on the development of the oral pills for obesity, just given the fact that the category, the broader GLP-1 category, is expected to be north of$100 billion, right? And we know that the orals are going to have a big piece of that. Then when you go back and you kind of consider some of the data sets that we've seen out of Novo Nordisk, out of Eli Lilly and others, it's been spotty at times for the pill because the mechanism or the delivery is a little bit different.

17:55And we already have awesome drugs on the market. So it's tough to know exactly where these are going to fit, but it's a consumer product at the end of the day, right? So by virtue of that, the market is going to be massive, even if the drugs aren't that great, I think. Yeah. What are the differences between the pill and the needle besides the delivery? Is the pill less effective? Does it work differently in the body? What's the difference? I think the main thing is that the half-life of the pill is so different than the injectable, right? When you take the once-weekly injectable, you're looking at a product that is incredibly efficacious for most of that week.

18:38And at the back end of that week, sometimes the effect wanes a little bit and patients that are on the product get a little bit hungrier and their side effects actually dissipate, which is good and bad. And then when you take it again, you kind of restart the cycle. Here, when you're taking these pills every day, I think there's an issue here with, can your body absorb enough on any given day to kind of really do the same, have the same effect as the injection from an efficacy standpoint without having the detriment of side effects. Because some of the side effects that we've seen in the pills have been worse, but we also haven't really seen what a real-life patient may experience, which is to say taking very small doses for a while before then titrating up to higher doses.

19:33We really haven't seen a trial run, I don't think, by any company that's ideal or really will mirror what we see in real life, which are patients probably either opting to take the pill because they're not that heavy and they don't need a high dose or that have already lost a lot of weight by taking a drug from Novo or from Lilly and kind of just want to stabilize their weight. We don't really know how this is all going to work out, but there are tens of millions of patients out there that are kind of like in the addressable market here. So I'm not really sure it matters. Yeah, the pricing is quite interesting, too.

20:13Between$149 and$299 per month, that's a fraction of the price of the injectable. What do you make of that pricing? What do you think of it? Well, the injectable prices are coming down too. So I think in six months, 12 months, there might be a little bit more parity. I think the pricing allows patients to get on it, especially those that are going to have to pay out of pocket. Right. And that's the biggest piece of this is, do we think that all of the patients that are eligible are going to get insured for it? Likely not. But if your doctor is willing to write a prescription for it, even if you're not covered for less than$200 a month, you can get access.

21:00By the way, the price of gyms in the United States is well north of that for decent ones, right? There are crappy gyms that you can go to monthly for less, but the good ones are a lot more. So if your whole objective is to sort of just lose 10 pounds, 20 pounds, I think these injectables are going to be very significant really quickly. And that's why I think it's super interesting for Novo to be in this spot. Yeah. What do you think of the competition that we're seeing in the oral GLP-1 space? Eli Lilly, for example, I know is working on their own pill. What does the competitive landscape look like?

21:38And what do you think this means for Novo Nordisk shareholders compared to, say, Eli Lilly shareholders? Well, it's really interesting because when you look at the stocks specifically, the expectations around Lilly's Oral or for Glypron and then the Oral Wegovi out of Novo Nordisk, the chasm between the two couldn't be bigger, right? But you've got one company that's north of a trillion dollars in market cap predicated mainly on their GLP-1 drugs, whether it's the oral or the injectable. And obviously, they have a lot more in their portfolio. But the stock movements on the back of obesity have been the most pronounced by far.

22:16Then you've got Novo Nordisk, which, you know, as of two weeks ago, was trading close to a five-year low. So the expectation gain between the two is so pronounced as though no one thinks that this Oral Wegovi is going to do anything, but Orfor-Glipron is going to be incredibly successful. So I think it's going to be much more similar than different. And I think the data sets are actually, from an efficacy and safety standpoint, not that different either. When the Lilly data first came out, investors weren't that excited about it. the stock dropped about 15 to 20 percent. And then over time, as the company kind of explain how the trial worked and the design and how they put patients on the drug, we all became more comfortable.

23:01But I think the expectations around Novo specifically are really, really low. And I think that's good. That's good for the stock. Yeah. Yeah, absolutely. I mean, this will be the final question. We've seen the hype cycle of the GLP-1 industry kind of run its course. It sort of hit that peak, and then suddenly people kind of went, oh, maybe this isn't going to happen the way we thought it would. And it sort of waned again, and it's definitely reflected in the stock price of Novo Nordisk. Do you think that we could be in for a reversal again? Are we about to maybe hit another phase of interest and excitement for this industry?

23:43Yeah, I don't really know where we are in the cycle. I mean, it felt like midway through last year, the waning aspect that you talked about was right. Yeah. And then as we got further in the year with Orpher Glypron data, Lilly hitting a trillion in cap, MetSera getting acquired by Pfizer in that bidding war, which was very strange. and then the structure data at the end of the year, I think we're still in a pocket where I think there's a lot of excitement. But what could get excitement for Novo specifically would be if the Oro-We-Govi started to take off and the market share disparity between it and Lilly kind of compresses a little bit.

24:22That's what's really going to take Novo up. Okay, Jared Holtz, healthcare equity strategist at Mizuho. Jared, really appreciate your time. Great to be with you. Thanks a lot.

24:36Well, GLP-1 drugs have come a long way since they were first introduced, believe it or not, in 2005. It was originally intended to treat diabetes, and then we learned it could treat obesity too. Then Ozempic came along, then Wegovi, then Munjaro, then Zepbound. And now we have reached a point at which one in eight Americans currently use GLP-1. So that is more than 40 million people. It's more than the population of Canada. Now, many people have said that we might have hit peak GLP-1. That yes, GLP-1s might be a big deal, but maybe they're not as big a deal as we once thought. However, we believe that this story is actually just getting started, because our view is that despite the incredible adoption we've seen over the past few years, the reality is GLP-1 still face significant barriers to entry.

25:34And of those barriers, one of the biggest is the fact that in order to take it, you have to stick a needle in your leg. Now, for some people, that might not be a big deal, but for many people, it is a big deal. In fact, it is a big deal for most people. It turns out 63 % of adults say they experience some level of needle phobia, i.e. they hate needles. And of those needle phobes, more than half say that they will actively avoid having their blood drawn because of needles. Meanwhile, roughly a third of them say they actively avoid getting vaccinated because of needles. So if a third of the entire adult population isn't getting their blood drawn because they're scared of needles, well then the obvious question is, what percentage of the population isn't taking GLP-1 drugs for the same reason?

26:29Is it also a third? Is it half? Is it higher than half? What we have here is a seemingly small and uninteresting issue, which is in fact a pretty gigantic issue. And as of this week, with the release of this new pill, that issue has been eliminated. You can now take a drug that helps you lose dramatic amounts of weight, and it is functionally no different from popping an Advil. That is a really big deal. And when you live in a country where 40 % of the population is already obese, you have to think that that 1 in 8 number is about to go way higher. Now, to be clear, Novo Nordisk isn't the only winner here.