If you’re a fan of before and after photos, check out the r/Mounjaro subreddit or TikTok page. It has first person accounts of people changing their lives by using the cutting edge new drug, Mounjaro, which was approved last year to treat Type 2 diabetes.
The thing is, even though it’s only approved to treat diabetes: Mounjaro has secondary benefits that include targeting obesity, with average weight loss of about 26% over a trial period, and the potential to curb heart disease. (It can have some hectic side effects which people find tough to deal with, however, and like any medication, may not be suitable for everyone.)
Mounjaro is the commercial name of the drug called tirzepatide, which was developed by pharmaceutical company Eli Lilly. We added Eli Lilly to our Spaceship Universe and Spaceship Earth portfolios earlier this year.
This month, the price of Eli Lilly shares reached an all-time high after reporting earnings. Eli Lilly announced that quarterly revenue jumped a whopping 28% in Q2 2023 (ending June 2023) vs the year before, while Earnings Per Share, which is a measure of profitability, increased by 86% over the same time period.
This wasn’t entirely due to Mounjaro: Eli Lilly also produces insulin, metformin, Cialis, and Prozac amongst its consumer medications.
Significantly, it’s also submitted an Alzheimer’s drug for approval to the FDA.
The potential market size of diabetes is massive: it’s the most expensive chronic condition in the US, with $1 out of every $4 US healthcare dollars spent on caring for people with diabetes, according to the US CDC.
So why was it the right time to add Eli Lilly to our Spaceship Voyager portfolios? We asked our investment team.
“Obesity and Alzheimers are large problems that haven’t significantly been addressed. The amount of time and money spent on weight loss is extraordinary. The Economist has estimated $250 billion was spent on dieting last year, though as they point out dieting tends not to work.
We believe there are numerous catalysts for further adoption. Mounjaro is taken by injection, and we believe a pill option rather than an injectable will likely increase demand. Recent results from Novo Nordisk showed a similar class of drug reduced the risk of heart attack by 20%. This is an important step in showing insurers that these drugs have preventative benefits, encouraging additional insurer coverage that should reduce costs for customers – especially in the US, where healthcare costs can be astronomical. From an investor viewpoint these drugs are attractive as usage is subscription-like requiring ongoing usage for some users to maintain effectiveness.”
Some of our Spaceship Voyager portfolios invest in Eli Lilly and Novo Nordisk at the time of writing.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. This article is general in nature and is not intended to be medical or financial advice. Past performance isn’t a reliable indicator or guarantee of future performance.
