Mad Money w/ Jim Cramer – Episode Summary (January 14, 2025)

In the January 14, 2025 episode of Mad Money w/ Jim Cramer, host Jim Cramer delves deep into the healthcare sector, analyzing key players and their prospects amidst a challenging market environment. The episode features insightful interviews with top executives from major healthcare companies, providing listeners with expert perspectives on industry trends, company strategies, and investment opportunities. This comprehensive summary captures all pivotal discussions, insights, and conclusions drawn during the episode.

1. Market Overview

Jim Cramer opens the episode by addressing the current state of the market, particularly focusing on the healthcare sector. He highlights the mixed performance of major indices:

• Dow Jones: Dropped by 221 points.
• S&P 500: Advanced by 11%.
• Nasdaq: Declined by 0.23%.

Cramer emphasizes his long-term bullish stance on healthcare stocks, despite short-term volatility. He asserts, “There’s always a bull market somewhere, and I promise to help you find it” (08:32).

2. Deep Dive into Healthcare Stocks

A. Eli Lilly (Lilly)

Cramer discusses Eli Lilly, a pharmaceutical giant recently facing stock volatility due to mixed earnings reports. Despite announcing robust revenue projections of $58 to $61 billion for the next year, the company’s fourth-quarter estimates fell short of Wall Street’s expectations, causing the stock to plummet.

Key Points:

• Mounjaro (Zepbound): Lilly’s flagship GLP1 drug, initially approved for diabetes and weight loss, is expanding into multiple indications such as hypertension, heart failure, liver disease, and more.
• Investment Perspective: Cramer remains optimistic, stating, “I can’t think of a better chance to buy the stock on weakness” (02:35).
• Competitive Moat: Lilly’s substantial investment in manufacturing ($20 billion) serves as a barrier against competitors like Novo Nordisk.

Notable Quote:

“Sometimes, reluctantly, we Wall Street has to think long term. I say reluctantly because in this business, if you’re talking long term, that usually means you either missing numbers or you’re dead.” (01:15)

B. Merck

Next, Cramer shifts focus to Merck, highlighting its strong oncology portfolio and strategic acquisitions.

Key Points:

• Keytruda: Merck’s renowned cancer drug remains a cornerstone of its portfolio.
• Acceleron Acquisition: The 2021 acquisition for $11.5 billion introduced Revelio, an FDA-approved drug for pulmonary arterial hypertension.
• Growth Prospects: Merck’s diversified pipeline extends into immunology and ophthalmology, with a focus on innovative treatments like T-cell engagers for difficult-to-treat cancers.

Notable Quotes:

“With that acquisition, they got this drug called Revelio...a real opportunity to go into small cell lung cancer.” (23:26)

“We are much broader today. I would no longer think of us as a Keytruda company. We are an oncology company.” (22:27)

C. Regeneron Pharmaceuticals

Cramer addresses the significant decline in Regeneron Pharmaceuticals’ stock, despite its strong drug pipeline.

Key Points:

• Pipeline Strength: Regeneron boasts 40 drugs in development, including the blockbuster Dupixent, which treats a variety of conditions linked to type 2 inflammation.
• Market Challenges: Loss of exclusivity for IAH (Age-Related Macular Degeneration drug) and competition from biosimilars by Amgen have pressured the stock.
• Future Prospects: CEO Dr. Glenn Lynch emphasizes the company’s focus on innovation and expanding their drug portfolio to rejuvenate growth.

Notable Quote:

“Our pipeline of 40 things is going to bring you more of those [blockbuster drugs].” (30:46)

D. Abbott Laboratories

The discussion then moves to Abbott Laboratories, a diversified healthcare company with a strong emphasis on innovation and growth.

Key Points:

• Business Diversification: Abbott operates across nutrition, diagnostics, medical devices, and pharmaceuticals in emerging markets.
• Financial Performance: Over the past five years, Abbott has grown its revenue by $10 billion organically and returned $25 billion to shareholders.
• Libre Glucose Monitor: Abbott’s Libre system, particularly the latest Libre 3, offers advanced glucose monitoring with scalable manufacturing capabilities.
• Lingo App: A new personal metabolic coach app aimed at promoting health and wellness, potentially surpassing the Libre system in market reach.

Notable Quotes:

“I think people have to start understanding Abbott as a health and wellness company because you apparently were the hit with Lingo.” (16:20)

“It’s one of the most amazing inventions in history.” (15:28)

Interview Highlights:

• Gregory Ford, CEO of Abbott Labs (14:04):
  • Discussed diversification and investment in R&D.
  • Highlighted Libre 3’s advancements and scalability.
  • Explained the vision for the Lingo app and its potential market impact.

E. Cardinal Health

Lastly, Cramer explores Cardinal Health, a major drug distributor navigating the complexities of the healthcare distribution landscape.

Key Points:

• Business Reinvention: Cardinal Health has transformed from a traditional middleman to a comprehensive provider offering data and technology solutions to community-based physicians.
• Strategic Acquisitions: Recent acquisitions in oncology and gastroenterology enhance their service capabilities, focusing on higher-margin, rapidly growing businesses.
• Financial Resilience: Despite losing its second-largest customer, OptumRx, Cardinal Health has executed a robust plan to maintain revenue growth and improve margins.

Notable Quotes:

“We’re not just the middle, we’re throughout the whole spectrum of the business.” (41:25)

“We have a very strong plan to remediate that.” (44:32)

Interview Highlights:

• Jason Holler, CEO of Cardinal Health (40:53):
  • Emphasized the company’s expanded role in the healthcare ecosystem.
  • Detailed how acquisitions have enhanced their service offerings.
  • Discussed the strategic response to losing OptumRx as a major client.

3. Listener Engagement and Lightning Round

Towards the episode’s end, Cramer engages with listener questions in the Lightning Round, providing quick buy, sell, or hold recommendations on various stocks. Highlights include:

• Starbucks vs. Dutch Bros: Cramer advises buying Starbucks based on long-term growth prospects while acknowledging Christine Brion’s success at Dutch Bros (37:36).
• Armor Shipping: Cramer expresses skepticism about the stock, choosing to pass due to the episodic nature of the container shipping industry (37:40).
• Super Microcomputer (SMCI): In response to accusations of falsifying books, Cramer upholds a strict sell recommendation based on the listener’s rules against accounting irregularities (38:56).
• FMT Corporations: Cramer rates it with a "hold," critiquing its sector involvement in crop chemicals and fungicides (39:00).

Dedication: He dedicates the Lightning Round to Alyssa, a dedicated staffer, celebrating her impressive achievement of running nearly 50 miles at Disney World (36:16).

4. Conclusion and Final Insights

In closing, Cramer reiterates his optimistic outlook on healthcare stocks with strong fundamentals and innovative pipelines. He encourages listeners to adopt a long-term investment perspective, emphasizing the transformative potential of companies like Abbott, Merck, and Regeneron.

Final Note:

“Ask yourself what happens if things get better? Please. What if the future is brighter than the past?” (07:56)

Cramer wraps up the episode by highlighting upcoming interviews, ensuring that listeners remain engaged and informed about future market opportunities.

Notable Quotes with Timestamps:

• Jim Cramer on Long-Term Investing:

  “Sometimes, reluctantly, we Wall Street has to think long term. I say reluctantly because in this business, if you’re talking long term, that usually means you either missing numbers or you’re dead.” (01:15)

• Gregory Ford on Abbott’s Performance:

  “We have grown our revenue $10 billion organically. We have increased R&D spend by 30%.” (14:43)

• Robert Ford on Merck’s Diversification:

  “We are much broader today. I would no longer think of us as a Keytruda company. We are an oncology company.” (22:27)

• Glenn Lynch on Regeneron’s Pipeline:

  “We are the company that brought you two of the biggest drugs in the history of the industry. And our pipeline of 40 things is going to bring you more of those.” (35:57)

• Jason Holler on Cardinal Health’s Strategy:

  “We’re not just the middle, we’re throughout the whole spectrum of the business.” (41:25)

Conclusion

The January 14, 2025 episode of Mad Money offers a wealth of insights into the healthcare sector, spotlighting companies with robust pipelines and strategic initiatives poised for long-term growth. Jim Cramer’s expert analysis, combined with firsthand executive interviews, provides listeners with the knowledge needed to navigate the complexities of healthcare investing. Whether you're a seasoned investor or new to the market, this episode equips you with valuable perspectives to make informed financial decisions.