Weight-loss frenzy making pharma stocks more volatile. Will the drama continue?

 The recent volatility in key GLP-1 stocks has put the spotlight on the anxiety Wall Street has about the weight loss market. The market is huge — a potential $150 billion a year by the end of the decade — and any financial miss, or negative data of any kind, will trigger outsized sell-offs.

This past week, for example, Amgen (AMGN) lost $12 billion in market value. Hims & Hers (HIMS) lost 10% in a single day in October when the FDA ended the shortage designation of Eli Lilly's (LLY) drugs. (Its worst day on record was Nov. 14, down 24% after Amazon (AMZN) launched a direct prescription service modeled after the company.)

Last month was the most dramatic, when Lilly saw more than $127 billion in stock value wiped out at peak loss in a single day. The company missed analyst estimates on its diabetes and weight-loss drugs, Mounjaro and Zepbound. (Investors bought the Lilly dip and the loss was pared to $54 billion by market close).

The recovery in the stock came only after CEO David Ricks responded to an analyst question on an earnings call about the sales miss, saying that demand was up 25% quarter over quarter. The stock started to pick up right after that, according to Citi healthcare analyst Geoff Meacham.

How volatile is that? The move seen in Lilly's stock is typically reserved for Magnificent Seven stocks. For example, the day after the election, Tesla's (TSLA) market cap increased by $120 billion.

The day of Lilly's loss, another company on its way into the GLP-1 space was grappling with what the sell-off could mean for its future.

Amgen CFO Peter Griffith told Yahoo Finance the company, whose GLP-1 candidate MariTide is still only in mid-stage clinical trials, was worried investors were going to change how they rewarded the company's stock — from weighing overall performance to focusing on a single product.

“There’s no doubt that MariTide … will eclipse the rest of our news here in the near future,” Griffith said, unaware at the time he would face that exact fate two weeks later.

The company's stock was hammered Nov. 12 after older MariTide data published by an analyst briefly appeared to highlight a problematic side effect, which was quickly waved off by other analysts and Amgen itself.

More volatility?

The potential for high returns has created an energy around the leading GLP-1 companies — and serves as a cautionary tale for those that will follow.

“There are more eyeballs on Novo and Lilly than any other stock in healthcare, by a mile. That alone is going to read more volatility,” said Mizuho's healthcare sector expert Jared Holz.

Some investors are looking for consistently large returns quarter over quarter and only care about the GLP-1 drugs.

“No one even asks a question outside of obesity on the Lilly or Novo [earnings] conference calls. And they both have a bunch of other things going on,” Holz told Yahoo Finance.

Lilly is one of two market leaders in the space, along with Novo Nordisk (NVO), and could be the first $1 trillion healthcare company by market cap.

It's why, despite having a diverse portfolio of products — including one of only two new Alzheimer's drugs on the market — the weight-loss drug Zepbound and diabetes drug Mounjaro are weighing more heavily on the stock. And misses of those two products are triggering Wall Street action.

Semaglutide weight-loss drug Wegovy, made by pharmaceutical company Novo Nordisk. (James Manning/PA Images via Getty Images) · James Manning - PA Images via Getty Images

Goldman Sachs analyst Chris Shibutani believes that while Lilly may not ever reach $1 trillion, it has outperformed for two, and potentially three, years in a row despite the volatility.

“That’s also a pretty exclusive club, where a stock manages, for three years in a row, to outperform its peers,” Shibutani said.

Citi’s Meacham pointed out that some investors may only be holding Lilly and no other healthcare stocks. “The reason I think you saw such a huge move is that there are a lot of investors that … may only own one healthcare stock, and that’s Lilly,” Meacham said.

Goldman Sachs’ Shibutani similarly noted more general investors have a “FOMO” (fear of missing out) mindset impacting the stock.

He noted that there are two categories that have invoked that feeling for the past few years: artificial intelligence and obesity.

It’s “a bit of zeitgeist, sort of a cultural phenomenon,” Shibutani said.

Holz also noted that there could be more volatility ahead for GLP-1s.

“These things kind of tend to trade with a zero-sum game — rightly or wrongly,” he said.

https://finance.yahoo.com/news/the-weight-loss-frenzy-is-making-some-pharma-stocks-much-more-volatile-will-the-drama-continue-140032355.html

US Opens Provocative Missile Base In Poland

 by Kyle Anzalone via The Libertarian Institute

After nearly two decades, President George W. Bush’s plan to put the Aegis Ashore missile system in Poland was achieved this week. The system is capable of firing offensive missiles, and is viewed as a serious national security threat by Russia. 

The base is located in Redzikowo, Northern Poland, near the Baltic coast. During the base’s opening ceremony, Polish President Andrzej Duda said, "The whole world will see clearly that this is not Russia’s sphere of interest anymore…From the Polish point of view, this is strategically the most important thing."

Since the base was announced by Bush, Washington has asserted that the purpose of installing the missile defense system in Poland, and a second in Romania, was to protect Europe from Iranian missile attacks. 

However, the launchers that fire the Aegis interceptors can also fire offensive Tomahawk missiles. Previously, the US fielded a variant of the Tomahawk that was capable of delivering a nuclear warhead. The Kremlin views the presence of the launchers in Eastern Europe as a strategic threat to Russia. 

As the base was under planning and construction, Russian President Vladimir Putin pressed multiple American presidents not to deploy the Aegis Ashore systems in Poland and Romania.

The Polish Foreign Minister noted during the opening ceremony, "Governments changed in the United States, in Poland, [since] this base was created. This base is a monument not only to the Polish-American alliance, its stability, but also to the Polish-Polish alliance."

Moscow argued that the system’s MK-41 launchers violated the INF Treaty, a bilateral arms control pact between the US and Russia.

The treaty explicitly outlaws the deployment of intermediate land-based offensive missile launchers. The MK-41 can fire Tomahawks. During the first Donald Trump presidency, Washington unilaterally left the INF Treaty. 

On Wednesday, the Kremlin Spokesman said Russia would respond to the base opening but did not provide details. “Of course, this requires the adoption of appropriate measures to maintain parity,” he stated. 

While the Aegis system has created significant friction between Russia and NATO, Warsaw wants to further expand the missile base. Polish Defence Minister Wladyslaw Kosiniak-Kamysz said on Monday the scope of the shield needed to be expanded.

https://www.zerohedge.com/military/us-opens-provocative-missile-base-poland

Gazprom Cuts Gas To Austria Off, Just In Time For Winter

 by Julianne Geiger via OilPrice.com,

Russia’s Gazprom PJSC has decided to play its favorite game: pipeline politics.

Starting November 16, Austria is off the guest list for Russian natural gas, following a €230 million ($242 million) arbitration spat between Gazprom and Austria’s OMV AG. OMV, refusing to let that cash slip away, decided to withhold payments to Gazprom.

As one might have guessed, that ended poorly.

Unsurprisingly, European gas prices didn’t take the news well. Futures climbed 2.7% to €47.49 per megawatt-hour, as traders braced for yet another disruption in a continent that’s seen enough energy drama already.

Europe’s gas supply has been teetering on a knife’s edge since the 2022 energy crisis, with any whiff of trouble sending markets into a frenzy.

To OMV’s credit, they’re keeping calm and carrying on.

The company has proffered assurances that it will still be able to meet supply obligations through “alternative sources”—clear evidence that Europe’s increasingly interconnected gas network means that Austria is no longer entirely at Gazprom’s mercy.

Still, the timing stings, with winter breathing down Europe’s neck.

Even the mere hint of a supply squeeze has governments nervous about heating bills and energy security.

Gazprom’s move is a reminder of Russia’s waning-but-still-potent energy influence in Europe. Sure, the continent has spent the last two years diversifying its energy sources—snapping up LNG cargos and tapping alternative pipelines—but Gazprom’s ability to cause a stir is alive and well.

As Europe’s heating season kicks off, this spat between Gazprom and OMV highlights just how fragile the energy landscape remains.

If nothing else, it’s a timely reminder for Europe to keep working on those contingency plans—and maybe stockpile a few extra blankets. Winter is here, and with it, more geopolitical games.

The news comes as Gazprom raised in October its 2024 investment plans by 4% to $16.9 billion, and as Europe’s benchmark natural gas prices surged on Thursday to the highest levels since last November.

https://www.zerohedge.com/energy/gazprom-cuts-gas-austria-just-time-winter

Zelensky accuses German chancellor of opening ‘Pandora’s box’ with Putin

 krainian President Volodymyr Zelensky has criticized a call between Germany’s chancellor and Russian President Vladimir Putin as opening a “Pandora’s box” that only works to undermine efforts to isolate Russia’s leader.

“This is exactly what Putin has been wanting for a long time: it is extremely important for him to weaken his isolation, Russia’s isolation, and to have normal negotiations that will not end in anything,” Zelensky said about Chancellor Olaf Scholz’s call.

The conversation on Friday was the first time Scholz had spoken with Putin in two years. It comes as the German leader gears up for a snap election and Europe waits to hear US President-elect Donald Trump’s plan for ending the war in Ukraine.

On the call, Scholz urged Putin to pull his forces out of Ukraine and begin talks with Kyiv that would open the way for a “just and lasting peace,” the German government said, Reuters reported.

The Kremlin said the conversation had come at Berlin’s request, and that Putin had told Scholz any agreement to end the war in Ukraine must take Russian security interests into account and reflect “new territorial realities.”

https://www.msn.com/en-us/news/world/germany-s-scholz-calls-putin-ending-western-isolation-over-ukraine/ar-AA1ua5Cr

Saudi Arabia Crown Prince MBS Cancels Trip to G-20 Summit in Rio

 

Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman has decided not to attend next week’s Group of 20 summit in Rio de Janeiro, said a person with knowledge of the matter.

The most likely reason is that flying more than 14 hours from the Saudi capital Riyadh to the Brazilian city may aggravate a chronic ear canal condition plaguing the 39-year-old widely known as MBS, according to the person, who asked not to be identified because of the sensitive nature of the issue.

https://www.bloomberg.com/news/articles/2024-11-16/saudi-arabia-crown-prince-mbs-cancels-trip-to-g-20-summit-in-rio

Israeli Officials Belatedly Claim Secret Nuclear Site Destroyed In Last Month's Iran Strikes

 Very belatedly, Axios has issued a report which claims Israel's airstrikes on Iran last month destroyed an active nuclear weapons research facility in Parchin. Three US officials and a pair of Israeli officials were cited for the Friday report.

"The strike — which targeted a site previously reported to be inactive — significantly damaged Iran's effort over the past year to resume nuclear weapons research, Israeli and U.S. officials said," the report says. The site has been identified, also in satellite images, as the Parchin Military Complex.

TOI: Satellite photo from Planet Labs PBC shows damaged buildings at Iran's Parchin military base outside of Tehran, Iran, October 27, 2024. The damaged structures are in the bottom right corner & bottom center of the image. Planet Labs PBC via AP

This included the destruction of "sophisticated equipment used to design the plastic explosives that surround uranium in a nuclear device and are needed to detonate it," according to the sources.

Iran has of course never acknowledged or confirmed this, and it rejects the accusation that it possesses an active nuclear weapons program. Instead, Tehran insists it only has a peaceful nuclear weapons program.

Prime Minister Netanyahu and other Israeli leaders have for years insisted that the Islamic Republic is bent on acquiring a nuke, and Netanyahu in particular has expressed readiness to do anything to stop it.

Israel's Oct. 26 attack, which ostensibly was in retaliation for Iran's Oct.1st ballistic missile attack on Israel, was conducted by airstrikes - and Israeli officials informed the US ahead of time that neither oil nor nuclear sites were being targeted.

If Israel actually destroyed the facility at Parchin, this would mean Israel deceived its number one external back and ally the US (which certainly wouldn't be a first).

However, this might also be propaganda and PR-signaling for other purposes. For starters, the author of the Axios report, Barak Ravid, has long been known to quickly convey Israeli government talking points to the public. If Netanyahu government officials want something 'leaked' to the West, they often go through him.

As for timing of the report, the Times of Israel (TOI) highlights the following imminent UN action:

The report came as the UN nuclear watchdog prepares to vote on censuring Iran for refusing to cooperate with its inspectors, and amid a report that the Islamic Republic told the Biden administration last month it would not seek to assassinate US president-elect Donald Trump.

There is legitimate fear that after the Gaza war kicked off, and as Iran and Israel have traded tit-for-tat direct strikes for the first time, Tehran may be indeed pursuing a nuke.

Israeli attack on Parchin "nuclear site": Fact or Fiction?

If so, the world can expect more Israeli anti-Iran action, including the potential resumption of a sabotage and cyberwarfare campaign targeting Iran's nuclear sites and infrastructure. In the past, Mossad has even assassinated top Iranian nuclear scientists.

https://www.zerohedge.com/geopolitical/israeli-officials-belatedly-claim-secret-nuclear-site-destroyed-last-months-iran

Manhattan US Attorney to scale back crypto cases, prosecutor says

 The U.S. Attorney's Office in Manhattan will devote fewer resources to policing cryptocurrency crimes after securing several major convictions, including that of FTX founder Sam Bankman-Fried, a senior prosecutor said on Friday.

Scott Hartman, co-chief of the securities and commodities task force at the Southern District of New York, gave his assessment one day after President-elect Donald Trump's former U.S. Securities and Exchange Commission chair Jay Clayton to become the U.S. attorney there.

Hartman said the office would not ignore crypto cases, but has fewer prosecutors working on them than when digital asset prices collapsed in 2022, a period known as "crypto winter."

"You won't see as much crypto stuff coming out of at least the SDNY in the future," Hartman said at a conference hosted by the Practising Law Institute in New York.

"We brought a lot of big cases in the wake of the crypto winter - there were a lot of important fraud cases to bring there - but we know our regulatory partners are very active in this space," Hartman said, referring to agencies such as the SEC and the Commodity Futures Trading Commission.

Clayton led the SEC during Trump's first term as president from 2017 to 2021. He would replace Damian Williams, an appointee of President Joe Biden, as U.S. attorney.

While at the SEC, Clayton pursued some crypto-related cases, but was less aggressive at policing the industry, which was smaller at the time, than current SEC chair Gary Gensler.

Many cryptocurrency executives supported Trump's campaign, believing Gensler's crackdown went too far.

https://www.marketscreener.com/news/latest/Manhattan-US-Attorney-to-scale-back-crypto-cases-prosecutor-says-48380194/