VALUE: After Hours (S08 E02): GLP-1 Drugs as a ‘Magic Pill’: Obesity, Heart, Cognitive Benefits

During their recent episode, Taylor, Carlisle, and Andrew Summers discussed GLP-1 Drugs as a ‘Magic Pill’: Obesity, Heart, Cognitive Benefits. Here’s an excerpt from the episode:

Andrew: So, the GLP-1 drug class is probably the closest thing I’ve ever seen to a magic pill that the industry has developed.

Jake: I would back that up with some anecdote of– I was at the JPMorgan Healthcare Conference a little bit last week in San Francisco, and that GLP-1s were still everyone wanted to talk about them the whole time.

Andrew: Yeah. So, they have metabolic benefits, so they lower your weight. They have cardiovascular benefits, so they lower your blood pressure, they improve your lipid profile. They have cognitive benefits, which I think are maybe still more on the early side of being totally played out. But they’re being looked at in dementia and other cognitive diseases. But literally, they lower cancer potentially, cancer rates, because again, people are losing weight and obesity is one of the primary drivers of cancer. So, again, the closest thing to a magic pill that I’ve ever seen.

The side effect profile is relatively benign. The first 30 days can be tough on your GI tract, so you might have nausea and vomiting for your first 30 days. But if you can get through that, the long-term impacts are profound. If you’re paying attention, Novo just launched a higher dose of their oral GLP-1. It’s oral Wegovy.

And interesting side note. So, this goes back about six years, but I did a lot of work on this drug class before it was really, widely understood to have– You know, it’s going to be the biggest drug class of all time. We owned a company called Emisphere, which got a royalty on the oral form of Wegovy. And so, I was very early to this drug class. I did a lot of research back then, literally spent a year of my life understanding the profound impact that this drug class was going to have. Unfortunately, Novo Nordisk bought that from us in 2020.

Jake: For too cheap, I imagine.

Andrew: Well, if it was still around today, you could imagine what it would be worth. But yes, I would argue they sold it too cheap. Yeah, we had a very good idea that this was going to be the largest drug class of all time back then. But there were very few small-cap ways to get exposure, because obviously Novo Nordisk and Eli Lilly being very large companies aren’t really on my radar, per se. They should have been, but they weren’t.

Tobias: Andy, you’ve had some experience with activism in healthcare. Can you tell us a little bit about that?

Andrew: Yeah. So, I’ve run two activist campaigns in my time at Summers Value. I would say one was an abject failure. That was number one. And then, the second one has been a very big success. So, the failure ultimately failed, because the business wasn’t a great business. I was able to get a board seat and was able to drive positive change. But the mistake I made was the business was not high quality, and it was more fragile than I expected, and it encountered too many headwinds.

I was only on the board there a year, I stepped off and sold my position, sold it at a loss. I used the learnings from the first campaign, applied it to the second, was far more successful. The second, that was in 2021. I’m on the board of that company today. But it’s been a fantastic experience. We have a wonderful management team and board of directors there who are performing at a very high level and I’m very pleased with how that has performed.

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VALUE: After Hours (S08 E02): GLP-1 Drugs as a ‘Magic Pill’: Obesity, Heart, Cognitive Benefits

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