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- [00:00]
Jack Howe
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- [00:33]
Terrence Flynn
If these drugs are successful at showing benefits in brain diseases, mental health conditions or inflammatory conditions, that could open additional adjacent markets. That's something that's not fully reflected in our numbers or consensus numbers.
- [00:49]
Jack Howe
Hello and welcome to the Barren Streetwise podcast. I'm Jack Howe, and the voice you just heard, that's Terrence Flynn. He's the head of US Pharma and biotech at Morgan Stanley, and he's talking about obesity drugs or GLP, wants WeGovy, Zepbound, that sort of thing. I will argue in a moment that this business has become the biggest profit story on Wall street, short of artificial intelligence. And there are new breakthroughs on the horizon in weight loss drugs and also some patent pitfalls to be aware of. But they look manageable. Let's get into it. Listening in is our audio producer, Emily Sumlin. Hi, Emily. Hi, Jack. I wrote a cover story this past week for Barron's magazine on what I called the everything drug. I'll explain that in a moment. This is a subject that I've written about for years. We've had Eli Lilly CEO Dave Ricks on the podcast before. There's a column I wrote for Barons about four years ago on this subject where I confessed to weighing an eighth of a ton. Emily, I don't want you to be too alarmed. That's £250. Don't worry, Jack. I can't run those numbers in my head. It was a real mystery to me to 250. I looked it up. That's a pretty healthy weight for a harbor seal or a panda, but. But not so much for a human male, even one who's 6 foot 4. The good news is, Emily, here's where you're really going to be impressed. I think I'm down a little over £10 since then. I might have slipped into the high £230s, and I think that makes me overweight as opposed to obese. Obese is a tough label. I think because as I've pointed out before, it starts with O, which is the roundest and fattest of the letters. And then beast just sounds to me like beast. It's. I feel like I'm being made fun of. It doesn't sound like a very medical term. Anyhow, for now I think I've fallen below the definition there, but it's a close call. It's touch and go at this point. Now there are many people out there who are having a lot more success than I've had. And it's due of course to these marvelous new drugs, GLP1s, which I'm calling the second biggest profit growth story on Wall street behind AI. Just take a look at Eli Lilly, which reports second quarter results this coming Wednesday morning. It recently passed Walmart, Verizon and all of the rest of Big Pharma in profit power. This year is expected to earn $31 billion, up 36%. And that's good for 14 place in the S P 500. And by 2030 that figure could double. That would put Lily ahead of bank of America and ExxonMobil and within sight of JP Morgan. All of the rest of the big earners in the S P500 are AI giants. Medicine and computer chips aren't very much alike, but in this case there are some key parallels. Both of these are capacity constrained markets with immense pricing power and vast and growing end demand. With AI, the better it gets, the more uses customers find for it. GLP1s are about to get a lot better too. We'll talk about that in a moment. There's also rising insurance coverage, new delivery methods, and an explosion of potential uses. Today we generally think of GLP1s as obesity shots. Tomorrow they might look more like an everything pill. These drugs control appetite, so they work wonders for weight loss. Because of that, it's unsurprising that they have also proven useful for conditions that are related to weight and diet, sleep apnea or snoring, fatty liver and heart disease. But did you know the GLP1s are also being studied for drug and alcohol addiction, kidney disease, Alzheimer's, Parkinson's knee, arthritis, psoriasis, asthma, ovarian cysts and cancer risk reduction. It turns out that these drugs aren't just simple appetite suppressants. They appear to act throughout the body as inflammatory modulators and chronic inflammation is seen as a root cause of many diseases. That's part of why estimates for the size of the market for these drugs are exploding. When I wrote four years ago about Lilly's entrance into the GLP1 market. That was when it launched Tirzepatide, which was branded then as Mounjaro for diabetes and is now also sold as Zepbound for obesity. Back then, JP Morgan predicted that the GOP market would reach $34 billion by 2031. That figure now looks quaint. Other Wall street projections soon topped $100 billion. This year, Morgan Stanley raised its 2035 GOP1 sales prediction from $150 billion to $190 billion. That's from diabetes and obesity alone. That figure implies 30% penetration by then among obese Americans, which would be up from 6% last year and about 10% penetration outside the U.S. there are several factors driving a growth inflection. Now, let me quickly mention two. For decades, federal law has forbidden Medicare, which is a health plan for the old, from paying for drugs that are intended solely for weight loss. And that changed July 1st with a temporary program that has $50 co pays for a month's supply of these drugs. That's meant to be replaced by a permanent program after 2027. This is a big deal. More than two thirds of Medicare beneficiaries are overweight or obese. The rule change will raise costs in the short run, but advocates say it will pay for itself over time by reducing costly health complications beyond Medicare. Employer coverage for these medications is on the rise, too. Two years ago, we were at 44% of employers. Next year, we're expected to hit 65%. In a recent survey, patients reported paying an average out of pocket cost of $119 a month. That's down from $196 a month two years ago. For patients with good insurance coverage, costs are a lot lower than that. Pills are another big plus for growth. Novo Nordisk launched one in January. Does everyone know who that is? There are basically two big key players in this market. The early leader was Novo Nordisk. They launched Ozempic, and for a while, people just called everything Ozempic, even if it was something else. Ozempic is for diabetes, and it's a chemical called Emily. We had a. We did have an argument over how we pronounce this. Where did we come down? I said, was it semaglutide? Did semaglutide win?
- [07:39]
Terrence Flynn
Yes.
- [07:39]
Jack Howe
I think I was saying it the way that everyone else who didn't read it critically said it, which is semaglutide. So I would say that's the language of the people. So semaglutide is called Ozempic when it's sold for Diabetes and Wegovy when it's sold for obesity. That's Novo Nordisk, which is a company in Denmark. The other big player is Eli Lilly, which is out of Indiana. And as I said, they sell Tirzepatide, which is called Manjaro if it's sold for diabetes and Zepbound if it's sold for obesity. Okay. Both of these big players now have pills. Novo launched a Wegovy pill in January and Lilly followed with a GLP1 pill called Foundao in April. When I wrote about these companies four years ago, as I said, Lilly had just gotten into the market and in trials, its drug appeared more effective. Patients lost more weight than they had on the Novo drugs. And there's a reason for that. We call all of these GLP1 drugs. GLP stands for glucagon, like peptide, basically a hormone that's released in the gut. And there are receptors for that hormone throughout the body. You can think of those receptors like lox and you can think of the natural version of this hormone like keys, and you can think of Ozempic as a master key. It can fit in the same locks and it can, for example, tell the brain to stop craving food. Novo's drugs work on a single receptor. GLP1. Zepbound from Lilly works on two receptors. There's GLP1 and there's something called GIP that stands for There's a high degree of difficulty on this one. I'm going to tell you in advance. Glucose dependent insulinotropic polypeptide. So basically, Lilly's drugs are what are called dual agonist drugs as opposed to single agonist. So basically, Lilly's drugs work two ways, whereas novos work one way. That's why they're more effective. When we're talking about the injectables with the pills, both the one from Novo and the one from Lilly work a single way. So Lilly's performance advantage is erased. In fact, in studies, patients on the Wegovy pill lost a little bit more weight. But the Lilly drug is more stable, which I think both bodes well for overseas distribution, where you need a long shelf life. We're going to get into more of this when we speak with Terrence in a moment. In injectables, Lilly has taken the lead from Novo. It's got about a 60% market share and for that reason, Lilly's stock has soared over the past five years and Novo stock has not. It makes for a big difference in stock valuation. We'll come to that too. In pills, Novo has an early head start and a dominant market share. 85% so far. We'll see if it can hold onto the lead there. Pills are expected to make up about a quarter of the market by 2030. They're easy and they're cheap, but people who can pay up are going to want the latest and greatest, and that, for their foreseeable future, means injectables. On that subject, I'll just mention two quick things before we come to Terence, and that is that Lilly has a couple of drugs in development that appear to improve on the results it's getting from its current market leader, Zepbound. One of them is called Retatrutide, and that one works in three ways, up from the current two. In other words, there's a third hormone receptor that it targets. And one of the things it does is gives people higher calorie expenditure while they're resting. In other words, they're burning more fat while they're sitting still. And people on that drug in trials have lost a profound amount of weight. In one key trial, patients on the highest dose lost 29% of their body weight. And that 29% is about 7 points higher than what patients lost on Zepbound. In a different trial, it rivals the weight that people can lose with stomach surgery. If Lilly is successful there, that drug could come to market as soon as next year. Patients there could either get increased weight loss benefits, or they could get the same benefits at lower dosages, which might help with side effects. There's another drug from Lilly that's in an earlier stage of development called Ellorelintide, and it's being studied by itself or in combination with tirzepatide. In other words, Zeppelin elloralintide. Let's call it Alora Ellora works in a totally different way from these GLP1 drugs. But the upshot is that GLP1 drugs, a couple of the side effects are they can make people nauseous or they can give them fatigue. And that can cause some patients to not eat enough protein or not get enough exercise. And when that happens, they lose muscle along with fat, and that is not ideal. Elora seems to specifically produce a higher ratio of fat loss to muscle loss. If Lilly is successful there, and if they can combine that drug one day with, let's say, Zepbound, maybe patients will be able to take the combo drug at lower dosages. That'll cut down on side effects, and maybe it'll help them lose fat while keeping muscle. But we're getting ahead of ourselves. The soonest a drug like that would probably come to market is 28. And there's plenty that has to go right along the way. But the outlook is bright and I think that's enough from me. To learn more about this subject, I reached out to Terrence Flynn at Morgan Stanley. Let's hear part of that conversation. Now. How would you describe the place where we are now? Has growth met your expectations, gone ahead of them, fell behind them? How would you describe the uptake of these medicines and the kind of trajectory that we're on?
- [13:07]
Terrence Flynn
Yeah, absolutely. Thanks for having me, Jack. I'd say big picture, I think we're still in the early to middle innings here of uptake of these medicines. I mean, the growth has been very robust. I think what we're seeing now is kind of 30% year over year in the US and that has generally tracked, you know, in line to ahead of our expectations. We have had estimates ahead of consensus for a while now. As we think about the rollout across the US in particular and the drivers that we've been following more recently are obviously on the access side. So I'm sure you're aware that Medicare started covering these medicines on July 1st. They're now oral versions of these medicines that supplement the injectable versions. And we're closely watching a new range of indications that could come on board over the next several years here and open up additional market opportunities. So again, we see a very robust
- [13:59]
Jack Howe
growth picture ahead, July 1st being the day right after the second quarter closes. So we're waiting for second quarter financial results for some of these companies, including the 800 pound gorilla Eli Lilly. What story will second quarter results tell us and is that or is it not reflective of the broader trend?
- [14:22]
Terrence Flynn
The story on the injectable side, like I said for second quarter has been rest of world expansion. That was the story in the first quarter that drove the big upside surprise. We're expecting that momentum to continue. As we think about Lilly's rollout of manjaro across over 50 countries, we've done a lot of work there to look at that growth opportunity and feel comfortable in our estimates. The other thing that I think we're going to be watching for, listening for on the second quarter call will be commentary on their oral GLP1 Foundao. Remember, this product only more recently got approved here in the US it was the second oral GLP1 pill to be approved in the US behind Novos oral WeGovy. And so we've been watching the ramp of both of those products and I Think one thing that's been encouraging to us is that they've driven market expansion. And so again, instead of just cannibalizing the existing injectable side of the business, you're seeing them actually grow the total market. And that's been consistent with how we've been thinking about the entry of these oral markets. Novo had a time to market advantage, so they do have significantly more share than Eli Lilly right now. But we do expect Lilly to catch up over the course of the year. As people become more familiar with Foundao and its profile, they have more share
- [15:40]
Jack Howe
in the pill, not in the injectable. It's my sense. Tell me if this is overly simplistic. When I look at it, it looks like Lilly has the better injectable, but versus Novo, the pill? I don't know, maybe it looks like Novo's pill might have the edge there in terms of its effectiveness. Do I have that right? And is there still room for both to succeed with their pills? And can the pills succeed without taking away from the injectables?
- [16:07]
Terrence Flynn
Yeah, absolutely. Good question. So if we step back here, the earliest GLP1 medicines were actually dosed with an injection every day. Now we're at the point where these are injected weekly. And so there's been a big advancement there. Lilly's injection, Zephybound or Manjaro, it's the same drug, just two different names, whether it's obesity or type 2 diabetes, actually targets a second pathway called GIP. And so you're right in that our view is the profile of Lilly's medicine in clinical studies is better than Novo's Injectable, Ozempic or wegovy. So Lilly does have the advantage there. In our view, they have 60 plus percent market share on the injectable side. Now, if we switch over to the pill, as you noted, these drugs are more similar than different. And so again here they both target only a single pathway, glp. And so as a result, the profiles are more similar. One of the differences that some physicians we speak with point out is that with the Lilly pill, you don't have any restrictions around food and water, whereas with Novos pills, right after you take it, you can't take, you can't have food or water for half an hour. So there are some restrictions. So again, we'll see how that plays out in the real world here. But from, you know, an efficacy tolerability perspective, our view is that these are more similar than different. One more point I'd make is when we think about the global rollout because remember, this is more than a US story. There's a significant number of people that have obesity around the globe. I think it's about a billion people right now. That's expected to double to 2 billion by 2050. And one advantage of Lilly's medicine is it's a true small molecule pill. So Lilly can scale that very effectively to large quantities and hence large numbers of people. Novo has a peptide pill and so it is more challenging to scale that because you need to make a lot more drug substance to meet the number of potential people that would be on that medicine. So we think Lilly does have an advantage to on the rest of world side over Novo.
- [18:14]
Jack Howe
I have seen Wall street forecast that somewhere around the end of the decade that company is generating maybe around $50 billion a year in cash, which is just seems like a preposterous sum for a drug maker. And I can imagine that that gives you a humongous competitive advantage when it comes to funding research, buying things for your pipeline and so forth. So I can certainly see, you know, the case for Lilly is there. What, what else out there do you like among the companies that compete with Lilly or any of the smaller ones that are, that are developing things? What do you like?
- [18:47]
Terrence Flynn
The other one we're overweight rated is Structure Therapeutics GPCR. This company has an oral GLP1 medicine that's entering phase three development as well. So that would be a competitor to Lilly's Foundao or Novo's oral WeGovy. It is a true small molecule, so much easier to scale, more similar to Lilly's found ao. The company also, interestingly enough, on the back of what we were just talking about has an oral amylin pill as well. They're one of the leaders there with an oral amylin. So Lilly's Alora is an injectable product once weekly Structure has an oral amylan pill that's in early stage development. And so that's another part of the investment thesis that's pretty interesting because as we talked about, companies are looking at various combinations of different pathways. And so Structure has one of the leading oral medicines in that space. So that's another important value driver. So those are the two we are overweight rated on. The other two that I'll mention just because I think it's worth noting in the context of the broader evolution of the obesity market is many of the medicines as we talked about, are injected weekly or they're dosed orally once a day. Two companies I cover where we're equal rate rated are AMGEN and Pfizer, they both are working on products, injectables that could be dosed potentially monthly. And so that's another direction that the future field might go in is if you get to a certain baseline, new baseline weight, maybe some people might want to take a monthly maintenance option as an injection instead of injecting every week. And so that's an area we're watching closely as well for both of those companies. And they're in phase three trials right now. So we're still probably 12, 24 months away from seeing data. The key question will be not just efficacy with those medicines, but how do the tolerability profiles of those longer acting medicines compare ultimately with the options that we have? Because, you know, again, the tolerability and safety profile is very well established for the existing medicines.
- [20:52]
Jack Howe
Thank you, Terence. We'll be back with more from Terence in just a moment after this quick break.
- [21:04]
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- [21:38]
Jack Howe
Welcome back, Emily. Thoughts so far on the everything drug? Just makes me picture an everything bagel. Anything on that bagel, scallion, cream cheese and lox, really. The tomato just ends up coming out, though. I want it. But the onion, you know, one bite, it's all gone. So I just kind of, I skipped the, the accoutrement, if you will. That's a savory situation. I'll go cream cheese with pimento olives mixed in and then the sliced lox.
- [22:07]
Lars Hartenstein
Okay. Okay.
- [22:08]
Jack Howe
That's about a $430 bagel in Midtown Manhattan, unfortunately. And there will be a poppy seed stuck in your teeth no matter what you do. That's right. But, but it's good for the economy and the poppy industrial complex. Big Poppy, as we call it. We're talking about GLP1 drugs. These have been remarkable moneymakers for Eli Lilly and Novo Nordisk. Although Lily stock has done much better, it has multiplied about five times in price over the past five years. Novo's American depository receipts, in other words, a version of its shares that trade here in the US those have gained just 11% over that stretch. And that leaves Novo at around 15 to 16 times this year's earnings forecast. That compares with close to 35 times for Lilly. So Lilly is more expensive. But Wall street overwhelmingly prefers Lilly stock because that company is projected to double its earnings per share over the five years starting from this year. That compares with a projection of cumulative 29% growth for Novo over the same period. Novo's ADR comes with a bigger dividend yield, about 3.5% versus a fraction of 1% for Lilly. Both companies are benefiting from a regulatory crackdown on sales of knockoff drugs by so called compounding pharmacies. Novo actually sued an online seller called Hims, but earlier this year it dropped that suit after the two companies signed a sales agreement. These companies will not be hurting for free cash flow. By 2031, Lilly is expected to generate more than $62 billion in free cash. That's about $40 billion more than Novo. And that money is already being spent on research and tuck in deals to diversify beyond GLP1s. With any blockbuster drug, there's a potential for a patent cliff. A moment in the future where the drug loses its sales exclusivity, faces generic competition and sales plummet. That seems like a manageable risk. In this case, Novo has patent protection on its key Drug through twice 2031 and Eli Lilly through 2036. Both companies have done what drug companies tend to do in these cases. They've amassed a thicket of patents on specific formulations and injector designs, and Those run past 2041. Investor concern is that if a generic form of Novos semaglutide emerges five years from now, it could be cheap enough to lure patients off of Lilly's tirzepatide. It's zepbound, in other words. But that concern might underestimate the massive manufacturing investments that these companies have made. Investment bank UBS analyzed production trends in markets like India, where semaglutide already lost its patent protection earlier this year. One generic supplier there, Dr. Reddy's Laboratories, recently lowered its guidance on auto injector pen delivery from 12 million a year to to 6 to 7 million a year due to impurities and other setbacks. UBS reckons that the world's generic ecosystem will only be able to support 25% to 30% of GLP1 demand by 2030. Anyhow, even after generics launch, many patients will be willing to pay premium prices for the best performance, like those developmental drugs I mentioned earlier. Let's pick back up now with my conversation with Terrence at Morgan Stanley. So Eli Lilly is the, is the leader with the current generation of these obesity meds. Novo Nordisk was the first to market. Tell me about generic competition. So much money at stake. And you know, there are patents that expire and it's different for each country. And then there are efforts by companies sometimes to protect their sales exclusivity by coming up with new things that they can patent and safeguard. What's the outlook there should? Do investors need to be concerned that there's going to be a patent cliff or do you think these companies can
- [26:10]
Terrence Flynn
manage that big picture? We think what you're going to see evolve is ultimately a two tiered market. So Manjaro, the Lilly product, we think is going to maintain a dominant position in the branded market because as we talked about, we see it having a superior profile. Whereas the semaglutide, or the generic versions of Semaglutide, the Novo drug, is going to ultimately expand the total volume of people on these medicines as it moves down into lower income brackets. And so you're going to see market expansion as a result of having generic versions available in some of these rest of world countries. And I think when you step back, even bigger picture and think about, you know, the biopharma industry, ultimately companies want to continue to innovate and come up with what's next, what's better, whether it's efficacy, safety, tolerability. And as we were talking about with Eli Lilly's portfolio is they're trying to constantly innovate to stay ahead of that patent clip. So ultimately you can bring new innovation and better options to patients. And so again, I think, you know, there's a lot of focus on this. But when you look back at some other disease areas, you do see a similar situation where generic versions will come in. But as long as there's a new option that's better, you continue to see market growth on the branded side. And so again, we think there has been a lot of focus on, you know, is this a race to the bottom on price, et cetera. But again, as long as companies bring innovation to the market that's delivering for patients, we think you will see expansion of the branded market.
- [27:48]
Jack Howe
Back to Lilly, you're bullish, which suggests you think that the stock should be trading higher than it is now. So you must think that investors are missing something. But it is such a widely covered and you know, it's a stock that gets a lot of attention. So what is it that investors, what, what's the most important one or two things that investors, you think are missing about this widely covered stock?
- [28:11]
Terrence Flynn
Yeah, I think big picture, it's the, the size of the tam as we talked about.
- [28:15]
Jack Howe
TAM is total addressable market. That's half my job here is acronyms.
- [28:18]
Lars Hartenstein
Go ahead.
- [28:19]
Terrence Flynn
Correct, Correct, Correct, sorry. Getting to the weed sometimes. So the total TAM, we raised our estimate to 190 billion from 150 billion several months ago. And as I mentioned, I think there's two pieces of that that are underappreciated. One is this opportunity for second and third line therapy. So again, there's been a big focus on GLP1s, but as we just talked about, there's other drugs with different mechanisms coming and those might be suitable to people that have tried a GLP1 and doesn't respond. Or maybe they have hesitancy about starting a GLP one for some of the tolerability reasons, whatever it is. And so ultimately we think you're going to see expansion of the market. The oral piece is the other driver of market expansion we talked about. I think that's more well understood now that we've seen the impact from Novo and Lilly's launches on the total market. The second piece is again, these new indications. That's something that's not fully reflected in our numbers or consensus numbers. And so if these drugs are successful at showing benefits in brain diseases, mental health conditions or inflammatory conditions, that could open additional adjacent markets. And so that's the other thing that we think is really interesting here. And then within Lilly's pipeline, again, they do have some interesting other opportunities in other diseases. And so they're working on drugs for Alzheimer's disease, breast cancer. They're going to have some readouts over the next one or two years here that could be also pretty substantial in terms of the commercial opportunity. So again, I think that's the other thing from a Lilly standpoint is it's going to be important to see them continue to diversify the business beyond the GLP1 franchise.
- [30:03]
Jack Howe
A lot of good stuff here. Thanks so much for taking the time to speak with me about this, Terrence.
- [30:08]
Terrence Flynn
Thanks for having me, Jack. I appreciate the opportunity.
- [30:11]
Jack Howe
Thank you, Terrence. It's remarkable to think that these obesity drugs could one day be used for so many different diseases. On weight loss, we might already be seeing societal level effects of these drugs. I think I mentioned already the US turned 250 this year and the obesity rate, which has climbed for decades, it's come in at 40.7% in one survey and that's down a couple points from five years ago. Let's call it between a point and a half and two points. There's a lot further to go because when the US turned 200 back in 1976, the obesity rate was just 15%. I'm not sure where I stood on the body mass index spectrum back then. I was probably sporting some husky sized bell bottoms, but I was 4, so I'm giving myself a pass. Some Wall street analysts are predicting modest declines in aggregate calorie consumption in the years ahead. That might already be contributing to a slump in big food shares. Makers of medical devices have sold off too, partly on fears that GLP1s can ward off the need for many future surgeries. I have always suspected that a lot of the economy, a lot of gross domestic product in America, comes from things that get a lot of money whipping around but don't really make us better off, don't make us happier. In other words, like we eat too much on one hand and then we pay for treatment for the resulting medical conditions on the other hand. And if you got rid of both those things, you'd lose a chunk of the economy, but you'd probably be happier. I always wondered what the economy would look like if you got rid of all the stuff that we shouldn't be doing in the first place. But maybe I've had it wrong. I spoke recently with Lars Hartenstein. He's the director of healthy longevity at the McKinsey Health Institute, and he said that if America were to achieve what he calls metabolic health at scale, that it could boost the economy by well over $5 trillion a year, or about 3% by 2050. GLP1s are only a catalyst for that, not the full solution, he says. Let's close with a couple of minutes from that conversation. You spoke about a 3% increase to global GDP by some future date. I think I read in your report it might be by 2050 or thereabouts. That's a big increase. And when I think about GLP1 drugs, there is, of course, the sale of the drugs. There are some offsetting things. Maybe there might be. One Wall street firm, I read a prediction that aggregate calorie consumption might fall. There's talk of the people might need fewer surgeries for conditions that can develop because of excess weight. On the other hand, I don't know, maybe people will need new clothes, maybe they'll go to the gym more. But 3% of GDP seems like a humongous number. What are the biggest contributors to this boost of growth? Where does that come from?
- [33:15]
Lars Hartenstein
Very simple answer. Because people will be healthier. And if people are healthier, they can be more productive, participating more in the workforce, and there will be also less premature deaths still during the time that they would otherwise be working. So it is really our model is entirely relying on how much healthier people will be and therefore how much more can they, on reasonably conservative assumptions, actually contribute to society. So we made no, you know, unrealistic assumptions or so how in aging societies, all of a sudden, you know, workforce participation of older adults will be increasing, or so even that, if that's not societally desired. So it's really people having less morbidity. Yeah. And therefore being more able to contribute and less mortality and therefore having longer productive lives.
- [34:07]
Jack Howe
This is contrary to something that I have always assumed to be true about gdp. It's a cynical view. So I'll just tell you in the back of my head, there's this voice that's always kind of said, well, you know, GDP is only this high because we do so much bad stuff that makes us sick, and then we have to go to someone else to make us well. Like we. We buy so much junk food and that makes us fat, and then we have to go to the drug companies to get slim again. If, and if we ever just develop healthy habits, we'd eliminate both of those things and GDP would fall apart because all of this economic activity that leads to no good would disappear. But it sounds like you're saying that I've been wrong about that assumption, that if we develop, if we truly develop healthier habits, that GDP would rise and not fall. Do I have that right?
- [34:52]
Lars Hartenstein
Yes, for sure. If people are healthier. People live longer lives and one of the biggest contributors to gdp, they're different. What are consumption patterns of the future going to look like? People will consume, but it's an exciting question what they will be consuming. And I think there's an opportunity to imagine right now, what are consumption patterns of tomorrow that are actually contributing to more metabolic health, but also to more well being more generally? So that, I think is a very exciting discussion. We have not looked in great detail yet of the consumption patterns, but they are emerging. But it's true. It's a truism that people are consuming or spending their disposable income.
- [35:37]
Jack Howe
Thank you, Lars. And I want to thank Terrance. And I should probably apologize to pandas and harbor seals for calling out your body weight like that. That was about my eighth of a ton. Not yours, Emily. Everything Bagel Sumlin is our producer. You can subscribe to the podcast at Apple Spotify wherever you listen. If it's either of those two places, you can write us a review. If you have a question, and if it's entirely or partly about finance, send it in. It could be in a future episode. Just record it on your phone using the Voice Memo app and you can send it to Jack. How that's H o u g h@barrons.com and brace yourself for a quick plug go read my GLP1 story in this week's Barron's magazine. That's it for me, reporting from somewhere in the high 230s. We'll see you next week.
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General Fusion Announcer
Fusion powers the sun and Stars General Fusion is working to bring the zero carbon abundant energy source to Earth as global electricity demand surges. Fusion has the potential to deliver clean, scalable power for a growing world. Proudly NASDAQ listed, General Fusion is the first publicly traded pure play fusion energy company in the world. With its magnetized Target fusion technology and operational demonstration machine, General Fusion is advancing toward commercialization, targeting a first of a kind fusion plant around 2035. Learn more at generalfusion. Com.