Novo-Nordisk (NVO)

He sold when it became obvious that LLY was winning the weight-loss race.

Still a high-quality franchise, but market expectations are setting lower. Weak chart technicals, with 200-day MA trending lower. Only 3-4% earnings growth over next few years. Long-term it'll come back, but caution is needed short-term.

He prefers LLY, which he owns. 

The difference between LLY and NVO is not significant; slightly in LLY's favour, but that's just currently. Wait out the negativity. Will still grow double digits. Likes it long term, but probably wouldn't look at it for another 5 years.

NVO chart's under pressure. Where are we in the saturation cycle for GLP-1 penetration? Also, what will the price/volume dynamics be, since NVO kicked off a price war?

LLY has the better position in terms of branded drugs. Hasn't pulled the trigger on either.

Losing market share, and LLY is really winning the race. You can see it in the chart. The GLP-1 space has a ton of legs for both diabetic and obesity treatment. Not his choice.

He's out. No clarity regarding its ability to growth the US market. Management change. No question it's a cheap stock. All weight-loss drugs have had prices come down; that's the uncertainty, and how do you value that?

Weight-loss drug was a huge launch for it, yet LLY has been surpassing them on clinical trials and pipeline in the therapeutic area. Drug launch does not equal pipeline. NVO is behind, hence the 10x PE. If you buy, you're signing up for the dividend yield and the hope that it doesn't lose too much market share along the way.

Screaming buy? No. Touchstone, cornerstone, foundation? Absolutely not. Makes sense as a very small part of a broad, diversified portfolio? OK.

There's too much competition in pharma, including generics. NVO is a one-trick pony (weight-loss drug).

He is not interested in the health care sector. Governments are indebted and pharmaceutical companies have patent cliffs because of the companies that produce generic drugs. Like other drug companies there is downward pressure on the stock because of patents coming off.

LLY is dominant in weight-loss, in large part due to aggressive marketing in the US. One positive is that its pill has been approved, rather than injections. LLY doesn't have a pill yet. Needs to right-size the company.

It reported yesterday and shares plunged nearly 15% and another 6% today. The quarter was fine, but the guidance brutal: 5-13% sales hit this year due to intense competition in weight-loss drugs (Eli LillY).

Used to own. Sold in 2024 when it broke the uptrend. Trended downward until the fall, then has had 6 months to establish a decent base. Broke the downtrend, went above $50, acting as though it's under renewed accumulation. May not go screaming back up the way it did in 2023-24, but looking pretty good technically.

LLY is breaking out to new highs. Bit more diversified than NVO, and a bit more stable. LLY is supposed to come out with pill form for weight loss sometime this year. Well above 200-day MA, which is starting to push higher. Prefers LLY.

NVO is more focused on 2 areas:  diabetes and weight loss. Recently announced pill version for weight loss, and that's very positive. Valuation's quite cheap. Competitive pricing, regulatory scrutiny. Trades at 17x PE, but earnings growth forecast looks cloudy for next couple of years. Might be building a base, but still a tad below 200-day MA.

Both have signed agreement with US government for expansion in Medicare, albeit with lower pricing.