Mad Money w/ Jim Cramer 1/14/25

Summary

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.

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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).

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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.

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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).

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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.

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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)

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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.

Transcript

[Jim Cramer]

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[Jim Cramer]

My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to a special San Francisco edition of Man Money. Welcome to Cramer. I'll be with my friends. I'm just trying to make a little money. My job is not just to entertain, but to educate you. So call me at 1-800-743- CNBC or tweet me. Jim Cramer. 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. That's what I keep thinking as we swoop down the second day of the JP Morgan Health Care Conference, which is filled with CEOs who are talking about the future of health care, even as most investors would say, hey, listen, tell me what happened today. So here's what happened. Dow Vades 221 points, S&P advanced.11% and the Nasdaq lost 0.23%. Why am I so willing to focus on the so Called out years because the long term possibilities for these companies, frankly, they're incredible. By the way, incredibly lucrative too, even as the present is good, but not great. So at the risk of antagonizing the day traders out there, let me tell you what I saw today give you a prelude to some of our amazing guests. I want to start with a stock that got pummeled today. Eli Lilly pulverized. Here's a company that preannounced 58 to 61 billion dollars in revenue next year, substantially better than expected on the back of those GLP1 drugs approved for diabete, weight loss and now obstructive sleep apnea. There's just one problem here, Louis. Fourth quarter estimates, the fourth quarter that we just finished, they aren't as strong as Wall street was hoping. So it went from the best of the best of the worst of the worst, finishing at the bottom, the S&P 500 today, which is saying some because there are 4,99 other companies that index that perform better than this colossus. So why am I not perturbed? Why not like everybody else running for the hills? Why did we tell people in the CBC investing club that we take advantage of the decline to do some buying after selling quite a few shares at much higher levels? I feel very alone on that. Well, I'll tell you why. See, I'm thinking that Luly's wonder drug Mujaro, also known as Zepbound, has way too many potential indications to write it off because of one subpar quarter. This drug I believe will work against hypertension, known as the silent killer, heart failure, complicated liver disease, joints, dementia and yes, heavy drinking. It has so many uses that really spending $20 billion to build up manufacturing so it can meet the demand, even though there's a very capable competitor, Novo Nordisk and there are a lot of companies trying to get in the space. These GOP1 drugs are not easy to make so that spending is the secret moat that will keep the competitors at bay. Hey, but short term they admit that they haven't done a great job launching the drug. I'm not thrilled about that either. I got to tell you however, I can't think of a better chance to buy the stock on weakness given that Mounjaro is growing faster than any other large drug. So let me ask you, do we want the fastest ramp up or do we want the biggest drug of all time? The so called community of analysts wants the former. I'll take the latter any day of the week. Oh, did I mention they'll soon have this weight loss drug in pill form, not just injectable for those who don't like to give themselves a shot once a week. Of course, it's not just the botched launch that's holding Lilly back. Bobby Kennedy Jr. Trump's nominee for health and human services is universally known as an anti vaccine proponent. Now that's true, but you could also think of him as a believer in diet and exercise. He's not a huge fan of the GLP1 drugs, but the food industry has made that diet and exercise regimen almost impossible for most people. So why not let those who can't diet or exercise enough take the shot? Oh, let me give you another negative here. Yes, the giant head and shoulders pattern in the stock chart. Any chart that's worth his salt knows that they pictograph what that spells. So short term things may look ugly for Lilly. I'm sorry, I'm a long term believer. I say that you want to buy or how about Merck? Okay, now here's a company with the single greatest anti cancer franchise of all time. It's called Keytruda. But I think it's not getting enough credit for an acquisition it made in 2021. That was a purchase of Acceleron for $11.5 billion. With that acquisition they got this drug called win review. It is approved by the FDA just this last year for an almost always fatal disease called pulmonary arterial hypertension. This is a drug that according to Merck's very non promotional CEO Rob Davis has quote pulled people back from the brink of death. He goes on to explain that sick people who use this drug are now I'm going to quote alive and may have to go back to work again. Win some, lose some. They also have a shot, Gardasil that protects against hpv. It's very common STD that can cause cervical cancer. It's a true lifesaver. Women have been using it for years. Chinese government recently approved it for men too. But for some reason Merck's having a problem with its Chinese distribution and women. Weird situation going over there right now. The stocks well ensconced a few points around 52 week low. I don't think it's going to stay down there, but I can't tell you how long it'll take for Merck to bounce back. So does that mean sell? Sure if you're a day trader, but not if you're an investor. How about Regeneron? Now here's a stock that traded at 1211 in August of last year. Now, after declining nearly 4%, today alone it sits at 690. Wow. The issue Regeneron has this fabulous eye care franchise being challenged by an Amgen Biosimilar. By the way, that's a biotech version of just a generic drug. But that's all Wall street cares about. Doesn't matter. Regeneron is working on 40 different compounds, many of which could be blockbusters. Doesn't matter if their breakthrough drug Dupixent is indicated for seven gigantic illnesses. Asthma, eczema, nasal polyps. This company has never lost its ability to develop new medicines, including the one that likely saved President elect Trump's life when he caught Covid near the end of his first term. For now, none of that seems to matter. But you know, one day it will. I still can't believe that Avid Labs, perhaps the most diversified health care company in the world with some of the greatest growth franchises, has a series of lawsuits hanging over its head, crimping its price earnings multiple. I think Abbott will win these baby formula cases yet. Who wants that overhang, right? Certainly not Wall Street. So what does the stock do? It languishes. Who knows how quickly things can change. Yesterday give you example, we had Jeff. Martha, he's the CEO of Medtronic. That's another stock that hasn't done anything lately. I thought he told a great story about all the new policies. Rolling out lifesaving products nobody seemed to care about. Was a big yawn today when the stock was one of the best performers. The s and P500 up 4%. I remember what he said yesterday, which is things are pretty darn good. It does make a difference. Look, stocks go in and out of style in the Wall street fashion show, you know that. I've taught you that whole sector's wallow at times. Right now health care's in some sort of doghouse, the likes of which I've never seen. Should I've got to tell you, companies with terrific multi year growth prospects, should they really be kept down by rising interest rates? Political headwinds. To me, that's precisely why these health care stocks are currently so cheap. Hey, call me a miser, I like cheap. But the bottom line. Ask yourself what happens if things get better? Please. What if the future is brighter than the past? If that's the case, and I think it is, then you have a lot of winners with these drug and medical device plays. Glad I could be here to tell you their stories. Let's take questions. Let's go to Gregory in California. Gregory. Happy New Year, Jim.

[Gregory]

I Hope you're having a good one.

[Jim Cramer]

So far. So far, so good. And I always love it when you call. That California accent does throw me, though. Yeah, well, it's with smoke inhalation. What can I tell you? It's changed my voice entirely. You know, when we last spoke in early November, it was just before the election. When I bought half a position in this stock.

[Robert Ford]

It was at $242, as I recall.

[Jim Cramer]

We spoke about the club actually taking a position in it, but I know.

[Robert Ford]

It was Lisa's birthday weekend.

[Jim Cramer]

I'm sure you had some appropriate amount.

[Gregory]

Of Fosro to celebrate.

[Jim Cramer]

But after the election, this stock rocketed higher, actually reaching 480. It was a double by mid December before settling back down to 380. So my, my, my question, Jim, is should, should I have, you know, at those ludicrous highs or is now the time to buy the other half so I can get a full position in a stock that could actually go, frankly, a lot higher? And you know, I'm talking about Tesla. It was my wife's birthday that it kind of threw me off. My game is correct, as Gregory points out. Gregory, I think that your Tesla idea is a terrific one. I do want you to buy more. Ever since we talk less, Tesla's become much more of a tech stock and much less of a car stock. And that's why you can keep going higher. And thank you for the kind words. You're just a blast. Okay, look, right now, health care is, is. It's in the doghouse. I mean, what can I do? It's really, really depressing. But if their future is brighter than the past, I think you're getting a real opportunity on some of these terrific companies. Well, Manny, tonight I'm concluding my conversation with some of healthcare's biggest names, including my exclusives with break these down. Abbott Labs, Merck, Regeneron, Cardinal Health. It's been a jam packed day at the J.P. morgan Healthcare coverage. You do not want to miss these interviews. So stay with Kramer.

[Gregory]

Don't miss a second of Mad Money. Follow imKramer on X.

[Robert Ford]

Have a question?

[Gregory]

Tweet Kramer.

[Glenn]

Hashtag madmentions.

[Gregory]

Send Jim an email to madmoneynbc.com or give us a call at 1-800-743, CNBC. Miss something? Head to madmoney.cnbc.com.

[Jim Cramer]

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[Jim Cramer]

What's next for Kramer Fave? Abbott Laboratories, the medical technology company for the Travel Trust. I thought they told a very good story at last year's J.P. morgan Health Care conference, but then the stock got derailed by all the fear over some baby formula litigation. Last fall, though, they won their first major victory in court. I am confident the stock can march higher now that investors can focus on the fundamentals again. Because the fundamentals, they're very strong. But don't take it from me. Earlier today I sat down with Robert Ford. He's the Chairman CEO of Abbott Labs. Take a look. Robert. I want to use this moment to reintroduce Abbott. People don't realize what's happened in the last Five years, how much bigger it's gotten, how much more you're spending R and D. I just want you to tell people who Abbott Labs really is.

[Gregory]

Well, we're probably one of the most diversified health care companies right now. We have a nutrition business, a diagnostic business, a medical device business and a pharmaceutical business in emerging markets. Over the last five years, we've grown our revenue $10 billion organically. We've increased our income by $3 billion. We've increased R&D spend by 30%. Our capex spend has increased by 60%, investing in manufacturing and digital transformation. And at the same time, we've returned $25 billion to our shareholders. So we've been able to invest in the business, grow the business organically, and our shareholders have been able to benefit through that return.

[Jim Cramer]

And yet we'll go into. The stock is very inexpensive. We own it for the Chapel Trust because it is so inexpensive. We've owned it for years and years from your history, but I think many people know you as the people who solve the conundrum about whether you have Covid or not.

[Gregory]

Yes, I mean that was, that was an interesting period in my, in my first couple of years. Company did incredible work. That business is now, as a lot of the COVID businesses and therapies and et cetera have kind of gone down to more.

[Jim Cramer]

We can now see who the real Abbott is.

[Gregory]

Yeah, that's, that's, that's now, now behind us. We've got an endemic state. I mean it's about $500 million of revenue and those are real earnings that are going to continue to be there.

[Jim Cramer]

Well, let's talk about the Abbott that I think people should know at home. Let's talk about Libre and your strategy for glucose monitor because this is one of the most amazing, amazing inventions in history.

[Gregory]

Yeah, incredible technology. We had figured out how to measure glucose from the interstitial fluid many years ago. The real innovation came in terms of how we manufactured it, manufactured at scale. And that incredible technology that the team put together really allowed us to take a different approach, really approach this as a mass market opportunity and price it at a way that allowed for a pretty significant penetration for moving the product from a niche segment to a much more broader segment. And that's what we're seeing and that's really been at the core of Libre is that scale and that leadership and cost allows us to really broaden the, the reimbursement of the system.

[Jim Cramer]

And while you do it, I mean there is a differentiation between Libre 1, 2 and 3 and 3 apparently has taken the world by storm.

[Gregory]

Correct? Yeah, we had. So Libre three is the thinnest, the lowest profile, the smallest sensor. And that's important for people with diabetes. We are manufacturing this at scale. We just opened a new facility now. So we were having some challenges with demand and supply. High quality problems problem. But you know, you know, we don't like those problems either. So. But now we've invested in supply and that supply is coming online and we'll start to continue to see this very strong growth rate in this platform.

[Jim Cramer]

I think people have to start understanding Abbott as a health and wellness company because you apparently were the hit with Lingo. It's. And you've also possibility have an app one day that will be able to tell us what we're eating, whether it's good or bad. But tell us about Lingo.

[Gregory]

Right now Lingo is doing great. If you remember last year we talked about it, we got approval for it. Towards the end of the year we launched it as a direct consumer play here in the United States, really focusing on four to five markets, only four to five cities.

[Jim Cramer]

But it just really tells you how you're doing.

[Gregory]

It tells you how you're doing, it gives you insights. It's like a personal metabolic coach. It translates all what you're eating and tries to give you insights on how to eat and how to do that. So the, the weekly orders are increasing every single week. What I really like about is the retention rates and the reorder rates are positively surprising. So that means that people not only trying it, but they're sticking with it. And that's really great.

[Jim Cramer]

Can it be billion?

[Gregory]

Listen, we're going to, this year we're going to focus on expand, expanding distribution, potentially bring it into retail and then going across the entire United States. I think over time this could be larger than Libre.

[Jim Cramer]

That would be incredible.

[Gregory]

Yeah, because the amount of people that, it's healthy, people that want to stay healthy and there's a lot more people that are in that category than people with diabetes.

[Jim Cramer]

Last quarter you had some litigation problems. The Stock goes from 109 to 99. You were fortunate to come on squawk on the street and we, we kind of explained that. At the same time though, there's still some people who think that you've got serious litigation risk for a very specialized portion of your baby formula. That's $9 million in revenues, that's backed by the NIH, the FDA and the CDC. And yet still there are lawyers suing you. It seems like that, that May have run its course to some degree. I know it's hard to predict, but it seems like it.

[Gregory]

It's hard to predict. But, you know, I'd say I was, I was. It's a difficult situation for these families to have to go through this. But, but, but I would say I was pleased that we won the last case. I was pleased at these public statements. The product is a standard care. There's no causal evidence. And let the specialists decide how to feed these very, very fragile. So, you know, I think that was a good win. And, you know, I think we've all got to come together, all the stakeholders, and say, listen, this is an important food for these premature babies. And let's, let's. Let's resolve this, let's solve this. And there are a lot of stakeholders, whether they're in government or regulators, that are taking a close look at this now.

[Jim Cramer]

I know I wanted to go into some of the great things you're doing with Hart and St. Jude. The wires, how your dual chambers. It's so great what you're doing, but it is wild card. We just have wild card week, and next is divisional playoffs. And you are doing concussion work that may resonate throughout the whole world, particularly with younger people. We don't know whether they have a concussion or not.

[Gregory]

Yeah. We developed a rapid blood test that is a rule out to determine if somebody does not have a concussion. And so the product we have today is a venous sample. And our vision is that this will become available in every single high school in the United States.

[Jim Cramer]

So we're not just looking at people's eyes or holding fingers up or making it rash.

[Gregory]

We'll have a.

[Jim Cramer]

That's over.

[Gregory]

Objective blood test to say, you know what? You do not have a concussion. You can get back in the game.

[Jim Cramer]

And how soon can we can. Every city and every school have.

[Gregory]

We're working on the clinical trial. So this is. We're a couple years out, but at least for the medical environment. So, like, you know, physicians can do this test, but I'm talking about the end state where a school nurse on a football field on the silent can do it. That's a couple years away.

[Jim Cramer]

Concussion just so horrible. And people don't realize you have multiple concussions.

[Gregory]

Exactly, exactly.

[Jim Cramer]

So bad. Anyway, this is Robert Ford, Chairman, CEO of Avid Labs, a company. We own my travel trust for many, many years. Robert, thank you so much.

[Gregory]

Jim, Nice. Nice to see you. Coming up, after making breakthroughs in oncology, Kramer sitting down with Merck's top brass to learn More about how the company is revolutionizing cancer prevention and treatment.

[Jim Cramer]

Next. With a few notable exceptions, this has not been a great period for anything health care. Take Merck. Last year, the big pharma colossus was down almost 9%. Is there any reason to think 2025 will be any better? Look, Merck's been putting in a ton of effort to deliver more blockbuster drugs. Now that's running up against some big patent expirations. The number of phase three drugs in their pipeline has tripled versus three years ago. So what's going to move the needle this year? Earlier today, we got the chance to sit down with Rob Davis. He's the chairman, president and CEO of Merck to find out. Take a look. When we last talked you had made an acquisition, people were concerned about it, but now I'm reading that Wind Revere has pulled people back from the brink of death. It's that strong a formulation? Yeah.

[Robert Ford]

Well, no, Wind Revere has been an amazing drug. It truly has. And what we're seeing is, and it's anecdotal, but we've actually had patients who were on transplant lists who have been taken off almost, you know, a very short time after starting Wind Revere. So it's having an amazing fact. We need to continue to see it. It grow, which we're confident it will, but it's an important drug, for sure.

[Jim Cramer]

I started with that because I think most people start with Keytruda and their mind is numb. They don't realize, maybe prostate, maybe bladder, maybe head and neck, and they feel that Merck has become Keytruda. I think when you have one of the greatest drugs of all time, it does tend to blot out others that you're working on.

[Robert Ford]

Yeah, well, you know, and I think it's a great point to raise because Keytruda has truly been transformational in the treatment of cancer. But importantly, we are now in a situation where we can literally leverage the strength of Keytruda to go well beyond Keytruda. So today we now have a much broader pipeline in tissue targeting agents with antibody drug conjugates into different areas of molecular targeting agents. Things like RASG12C as an example. So we are much broader today. I would no longer think of us as a Keytruda company. We are an oncology company, and increasingly we're a diversified company because, as you mentioned, Wynn Revere and the cardiometabolic space. We have other opportunities there we can talk about. And we're moving into immunology, moving now into ophthalmology. So the breadth and the depth of the pipeline we have right now is, is the most diversified in the company's recent history, which I'm really excited about.

[Jim Cramer]

I think people don't understand also you're not just targeting the so called easy cancer cancers. You're going after the cancers that have been something that had been worked on for 150 years and no hope.

[Robert Ford]

Yeah, well, you know, one I might highlight there that we're really excited about. We did a deal in 2024 for a company called Harpoon, brought in a T cell Engager. This is a new approach to how to think about cancer. And when we combine that T cell engager with the B7H3 antibody drug conjugate we have with Daiichi Sankyo, we now believe we have a real opportunity to go into small cell lung cancer. A significant portion of lung cancer which largely has been untreated. There's been nothing. And that's just one example where I think now we're at a point to really be able to go after some of these cancers that historically have been very difficult to prosecute.

[Jim Cramer]

It's my job to talk about the stock and I see the stock in 99 with a very good yield. And I say to myself, well maybe the problem is Gardens Sil and we may have someone in the administration, Robert F. Kennedy Jr. Who doesn't really necessarily believe in vaccines. How big is Gardasil and how big can it be?

[Robert Ford]

Yeah, well, so Gardasil for us right now if you look on a global basis is you know, an eight and eight, eightish billion. It peaked at about eight and a half. And we believe we can continue to go and drive towards achieving 11 billion by 2030. Because there still is a significant unmet need out there that we have to address, really a global need and not only continuing to penetrate for females to help with cervical cancer, but increasingly for males for HPV related cancers that are specific to men. In addition to helping ensure that by having the male population vaccinated, we protect the females. So you know, this is an area where we are continuing to invest and I think the science and the effectiveness of this drug is proven. It is truly seen globally as an anti cancer vaccine. It's one of the only ones out there.

[Jim Cramer]

Let's talk about globally because I know the Chinese have, they've not necessarily had a, what I call a reasonable game plan that could change.

[Robert Ford]

Yeah, well, so if you look at where we are in China, we've been really focused to date on the female population. We just got Approval for Gardasil for males in China in the 9 to 26 year old category. And so we're in the middle of launching that. That's about 200 million people, 200 million males in the demographic that we think we can go after on top of the 120 million females still out there. So China is still an opportunity. But increasingly we're looking to how we go beyond China broadly and frankly beyond Gardasil to the breadth of the portfolio we have.

[Jim Cramer]

I do want to talk about GOP Dash 1 because you are working on some things that I know you are someone who under promises possibility of over deliver but you've got ideas that are a little bit different in terms of making so that if it's that big a drug, there's a lot of room for Merck.

[Robert Ford]

Yeah. So there's, you know, we have really two areas we're focusing on in the GLP1 space. We have today in Phase 2B development, a GLP1 glucagon dual agonist for Mash. This is an injectable peptide combination with the glucagon that we think is best in class in liver fat reduction. It brings with it weight loss characteristics pretty similar. You can think of an ozempic type level. And that drug is something we think could be very important because while the obviously the GLP1s have been important, they have not penetrated mash the way we think they could. And we think we have best in class, which I think you're referring to, is beyond that. We just did a deal to bring in an oral GLP1 small molecule. And our belief is if you can find the right oral small molecule GLP1 backbone, the ability to combine that with multiple different agents to start to drive meaningful outcome improvements beyond just the weight loss benefits is what we're really focusing on dealing with some of the side effects, side effects that the current drugs have, the nausea, how can you manage those. Those elements, the muscle degradation, some of those elements. So really it's the next generation of GLP1s is we're focused oral small molecules and that really probably will be out for us into the early 20, I.

[Jim Cramer]

Think Rob, the things that you've done are remarkable most of the time when I see these acquisitions, by the way, I get very concerned that they can ever deliver on the numbers. When Revere I started with that only just because this is a wonder job.

[Robert Ford]

It is.

[Jim Cramer]

You made the right move on that one.

[Robert Ford]

Well, thank you very much.

[Jim Cramer]

Thank you. Rob Davis, Chairman CEO of Merck. Always good to see You.

[Robert Ford]

Thank you.

[Jim Cramer]

Great.

[Robert Ford]

Great to see you.

[Gregory]

Coming up with Regeneron shares sliding, Kramer is talking to the CEO to find out if what's in the pipeline can revitalize the pharmaceutical name's long term prospects.

[Jim Cramer]

What the heck just happened to the stock of Regeneron Pharmaceuticals? After spending the last couple decades steadily roaring higher, this stock has plunged more than 40% from its all time highs just last August. It fell another 26 points today or 3.6%. Now some of that's because the market has no appreciation for drug stocks. But some of it's because they've lost exclusivity for I wet age related macular degeneration. Yesterday, Regeneron had more bad news in the IAH front. Their high dose version had weaker than expected sales in the fourth quarter. Although they also some positive things to say about a couple of other big drugs hitting major milestones. That I was a huge franchise for these guys. So will they be able to get Wall street to look through that? Maybe focus on a very exciting pipeline. Earlier today I spoke with Dr. Lynch Leiper. He's the co founder, co chair and CEO of Regeneron Pharmaceuticals. One of the first guests that we had on mad money nearly 20 years ago. Take a look. Glenn, I'm thrilled to see you because people may not realize you were my first guest. Your Stock was at 5. How would you have done had you bought the stock and held onto it?

[Glenn]

Five bucks? It's hard to do that math. It's. Those are big numbers. But you're going to be up over 100 fold for sure.

[Jim Cramer]

Well, I like that. It's good to make money for people. Now I wanted to talk about that for right now. When I listened to the dialogue of the analysts and you. It's about how IAH hd maybe it's disappointing, that was the first drug you introduced on our show and that Regeneron really should just be returning capital. Can we frame the discussion, reframe the dialogue? What should people really be thinking about when it comes to Regeneron?

[Glenn]

Right. I think you have to understand where drugs come from. Where our drugs come from. We have two of the biggest drugs in the history of the industry with Dupixent and I. And they're not dropping. We don't buy them from somebody else. George and Koplos, our chief scientific officer and the team invent these things. They come from our pipeline. So we've proven we can do that. We've got these two mega blockbusters. We've had 10 drugs approved. We have 40 drugs in development. Now, 40 drugs at the conference here this week, we talked about 10 of them, addressing markets of an aggregate maybe $200 billion.

[Jim Cramer]

Okay, explain to me why people feel that you're. That you're after niche areas.

[Glenn]

I don't understand why people feel allergy.

[Jim Cramer]

They think is niche.

[Glenn]

That's silly. How many people have serious allergic diseases? There's a tremendous amount of tremendous need. You know, our first patient, which we talked about at the conference yesterday, is a patient who is allergic to so many things that the only thing this person could eat is formula, chicken and potatoes. Nothing else. Imagine that existence, okay? And so allergy is a very big problem, and it's a serious problem. Plus, people can die from allergic diseases.

[Jim Cramer]

Well, inflammation. When we talk about eczema, eczema's gigantic market, again, you are the dominant player in that market, right?

[Glenn]

You know, people use the word dominant. And why are you dominant? Because you bring a drug that really changes people's lives. And if I showed you the pictures, even of the babies with really bad eczema, red scratched oozing. And then after a few doses, we've seen these miraculous. I use the word miraculous because the effect on some people's eczema has in fact been miraculous.

[Jim Cramer]

Right? So let's go back to dupixent. Why does this have so many indications? What is it about that works for so many different ways, Right?

[Glenn]

So it turns out that some people have what's called type 2 inflammation. It's a type of allergic inflammation, and it gets manifest in many different ways. In some people, it gets manifest as eczema. In other people, it gets manifest as asthma. Some people gets manifest as chronic obstructive pulmonary disease, some people as esophagitis, some people as nasal polyps. But it's all this common theme is type 2 inflammation. So our drug, naturally, if it's able to block type 2 inflammation, will work in a variety of diseases where type 2 inflammation is the driver.

[Jim Cramer]

Now, I do want to go back over Aaliyah so you have a better version, lasts a lot longer. When you first came on, Avastin was weak and you said, listen, how about if you do it only once a month? This is now not even once a month. The same time Amazon is issued biosimilars. Some people feel that IAH HD no longer an important drug. Can you explain why both of those. Why don't you just say why both of those narratives are incorrect?

[Glenn]

Well, I think that you have to understand, first of all, thanks, Tam. Imitation is the best form of flattery. If they want to spend their time imitating us, God bless them. We'd rather spend our time innovating. We bring forward. They're working on yesterday's news, which is kind of a. Leah. We're working on the next generation I Lear hd. And so there's. They're kind of chasing. Kind of chasing the future. We're trying to create the future.

[Jim Cramer]

Now, one thing. Do people realize that you have a very formative cancer oncological franchise?

[Glenn]

I don't think they do. You know, it's interesting how big. Well, we've already crossed a billion dollars in our first drug lip tayo. But what we're going after is tens of billions of dollars. And it's interesting. Just yesterday we announced this study. You might find this fascinating, Jim, where we did a study in what's called squamous cell cutaneous squamous cell carcinoma, where people who.

[Jim Cramer]

Skin cancer.

[Glenn]

Skin cancer people have had surgery, but the docs are afraid that it was going to come back. Okay.

[Jim Cramer]

And it does come back. Yeah.

[Glenn]

And it does come back, unfortunately. And it can be bad when it comes back.

[Jim Cramer]

Yes.

[Glenn]

Well, we showed a 68% reduction on the risk of coming back. And by the way, our chief competitor Katruda did the same setting. They had nothing. Their trial failed. So I feel that Regeneron knows how to make and develop drugs for important conditions. This is an important condition. We'll submit it to the FDA shortly.

[Jim Cramer]

Okay. A lot of people are concerned about in the current administration when it's running. Of course, President Biden didn't want to be in the same room as CEOs. How would you regard your relation with President Trump?

[Glenn]

Well, I would say the pillar of that relationship might be that the drug that George invented, a monoclonal antibody, probably saved his life.

[Jim Cramer]

Well, that could be in a transactional presidency that could play a role, perhaps.

[Glenn]

But that's what we do. We try and save people, people's lives. It happened that we saved the president's life.

[Jim Cramer]

Now, what do you think happened to. I know it's. It's up to me to talk about the stock, but how did the analysts get so trapped in the idea that all matter was the biosimilars in Amgen? Because it's the opportunity for people who think long term to be able to buy.

[Glenn]

Yeah, I mean, I think that people have a hard time a little bit Regeneron. When you have a company that has two mega blockbusters, 40 things in the pipeline. 40 things, it's hard to focus. So they focus on something that's easy for them to look at, a quarterly number. We're looking out over years and decades and so forth and there's a little bit of an iceberg effect that people looked at something and they missed the whole picture. The whole picture is we're the company that brought you two of the biggest drugs in the history of the industry. And our pipeline of 40 I think is going to bring you more of those.

[Jim Cramer]

Well, I'm glad you're taking a long term view. That's why people watch our shoe, that's what they're interested in. Lynch, I've heard the CEO of Progeneron again, our first guest. $5, I call that bankable. Thank you. Lynn, great to see you.

[Glenn]

Thank you Jim, great to see you.

[Gregory]

When we return, master the markets one stock at a time.

[Jim Cramer]

The lightning round is up next. I would like to dedicate this Lightning round to a mad money staffer who is faster than lightning and just ran nearly 50 miles in a few days at Disney World. Yes, it's Alyssa. The Sherminators, I call her. We are so proud of you. And now it is time, it is time for the lightning round card. As we take a close round parts, we change the stock standard. Bye bye bye solutions. We go to close right and plan itself and then the lightning round is over. Are you ready Ski daddy Tower Light round Question. Let's start with Tyrone and Virginia. Tyrone. Oh yeah, Jim, I'm looking at two stocks. I was looking at the Starbucks because I'm intrigued by Brian Nichols taking over but Christine Brioni, she seemed like he's taking Dutch Bros to the top. That's the, you know, I'm gonna give you a two for. I'm not supposed to, but I will. Starbucks I like for the Chapel Trust. And I think Christine is doing a remarkable job at Duck Post. Yes, the stock is all the way up. You buy some now at 136 times earlier than you buy some lower and that's the way to play. Let's go to Tom in Arizona. Tom. Hey Jim, the stock I'm calling about was a market darling back in May.

But it's pretty much tanked since it does pay an 8% dividend but the.

Quarterly amount really fluctuates. Analysts seem to be all over the board on it. So Jim, is it time to, to sell, hold or load up on Armor Shipping? I'm not a fan of Armor Shipping. I'm not a fan of most of the container and just kind of commercial cargo ships because they tend to Be too episodic for me. So I'm going to take a pass. Let's go to Jerry in Arizona. Jerry. Mr. Kramer, good afternoon. I'm calling to you for your opinion. My stock has just had Hindenburg Research accused the company of falsifying the books. And after that, Ernst and Young, who was doing the books, quit. Earnings have been delayed because of this. My question is, is SMCI Super Microcomputer a buy seller hold? I have very strict rules and companies that have accounting issues and that is sell, it doesn't matter, I don't care. And that's it. Accounting regularities equals sell. It's made me a lot more money and sales me a lot more than any one of any of the rules that I have. I'm going to Mark in New Jersey. Mark. Mark. Why don't we go to Sam instead? Let's go to Sam, Pennsylvania. Sam. Jim, how are you doing? Let's go, Barry. Anyway, go Wheels.

[Gregory]

Here's a company that I discovered on my way into the city of Philadelphia.

[Jim Cramer]

And that's FMT Corporations. Locals may know it by its shiny global headquarters right near 30th Street Station. Well aware of it. And that FMC, the old food machinery company, by the way. Look, I love Philadelphia, but I can only rate that one a whole because I don't like the sector it is in. Crop chemicals, fungicide. No, I'm not there for that. I'm sorry. And that, ladies and gentlemen, conclusion of the lightning round. The lightning round is sponsored by Charles Schwab.

[Gregory]

Coming up, could the drug distributors be an under the radar winner in the healthcare space? Kramer's going one on one with Cardinal Health to see how it brings treatments all the way from pharma companies to patients.

[Glenn]

Next.

[Jim Cramer]

Gotta say, I love an industry that can take a ton of political heat without it doing too much damage to the stocks to say nothing. Earnings take the drug distributors. President elect Trump has bashed the middlemen in the health care system. And the drug distributors, they're definitely middlemen, but they also save their customers a lot of money and consistently generate strong numbers. Take Cardinal Health, which is actually going well beyond a middleman these days. This morning they announced that their earnings for the current fiscal year should come in at the high end of the previous guidance. It doesn't hurt that the stock is just darn cheap, but is that enough, given that the whole industry could have a target pain on its back? Earlier today, we got a chance to check in with Jason Holler. He's the CEO of Cardinal Health on the Sidelines of the JP Morgan Health Care conference. Take a look. Jason, a lot of people think that your company is just a middleman. But you have reinvented this company. You are now the force to help community based physicians. You're also. You've even done private label. This is not the old Cardinal.

Well, we had some of those pieces for many, many years. But you're right, we're leaning into investments on the wide end of the spectrum of healthcare industry. And when you think about where Cardinal Health participates today, it's the beginning, the middle and the end of the industry. We work with every innovator, every manufacturer in the healthcare space and we deliver those products all the way through the infrastructure to the final customer, final providers, and in some cases directly to the patient. And in some cases we're the actual provider, in some cases we're actual manufacturer. So we're not just the middle, we're throughout the whole spectrum of the business.

Why do you think people don't see that?

I think they do more and more. Especially who matters most, which are our customers and patients, those that rely on us for that service each and every day. I think there's opportunities to tell the story more broadly to investors and the public. But generally speaking, we are a B2B company and we're really focused on making sure our customers needs are taken care of more than any anyone else.

When I saw you last, you were talking about making some acquisitions and they might change again the face of the company. And then you proceeded to do some very big ones but didn't hurt the balance sheet.

Right? Right.

Yeah.

No, in this completely consistent with our strategy. What we've done with specialty business more than any of the others, which are three of those four acquisitions that we've done more recently, is very much focused on providing broader capabilities for that specialty community physician. That physician has broad needs. For a long time. They've received great service as relates to distribution and other contracting support. But what we've done is augmented our capabilities to provide other data and technology solutions like the PPS analytics that we acquired with the specialty networks acquisition to provide a full capability for helping those physicians manage the clinical and communication needs with their patients. But Also more recently, two of the big ones in oncology and in the GI space is for the MSOs to help physicians manage their back office as well as their complex administrative.

Okay, well, let's go there. The GI Alliance, Advanced Diabetics support a supply group. These are things that I don't see otherwise. Please explain to people because these are What I call proprietary business, not commodity.

That's right, Jim. Much higher margin, very fast growing businesses. Two very different acquisitions in two very different spaces. The first GI alliance is in that specialty physician, community physician space. It is focused today on the GI space, gastroenterology. However, what we saw with that team and that product and that capability is a fantastic opportunity to expand beyond GI into other therapeutic areas. So what we're doing with the MSOs and the specialty support is having two very independent platforms. One for oncology, those oncologists have very specific needs, and the other one is in the other 60% of the marketplace. And that is GI, it's rheumatology, it's urology, neurology. And so there's a lot of opportunities for us to take that very strong start that GI alliance has built and bring it across into those other therapeutic areas.

For a moment, just want to talk about the back end. You're a technologist, but you're also a rather humble business person. But you have used quietly artificial intelligence in a way that has made it so your substantial customer service business is actually generating not the negativity that everybody else. It's.

Yeah, we're using across the business. And so we don't talk about AI for AI sake. We talk about what does it do for the efficiency of the business, but more importantly, what does it do for our customers, for physicians, for the providers to provide better services ultimately to patients. And it's those outcomes that at the end of the day helps the patient, but creates a lot of value for that physician. But also, of course, you know, we participate in that as well.

Doing. What people don't also realize is you have a substantial business, PBM, a substantial business. And by the way, you're also. OptumRx is a huge customer with 17% of your business.

Well, it was. So Optum is no longer right.

But I'm saying that it didn't hurt you when they.

No, no, that's. That's right. We had a very clear plan, was.

The second largest customer. People have to realize most companies would miss the quarter. Missed a quarter. Missed a quarter. Yep.

And we had a very strong plan to remediate that. So it's about $40 billion of revenue. That was a cliff event at the beginning of this fiscal year. And we had a very strong plan in place. We got on it and we already had a lot of commercial momentum with other customers. Our value proposition was stronger with other customers. Optum is, you know, a big good customer, but it was low margin and the volume was quite volatile and more complex to support. So what we have done is taken that time, attention, capacity and we focused on those customers that value those services and then in addition bring it up.

Because one of the reasons why people hated Cardinal frankly was because if you lose your second largest customer, there's no way you can make the numbers. But you that made it up with better margin including acquisitions business. And you just ran Cardinal better. And I think that that's why this stock's 52 week high. Most of the stocks I've talked about here, 52 week low.

Yeah, well we certainly executed on this business. We even with that plan, we only had a 1 to 3% earnings growth expectation for the far segment this year. Last quarter we had a fantastic first quarter of the year that that allowed us to increase our full year guidance to 4 to 6% for that segment, which is our long term expectations for that business. And this morning we announced that we're at the high end of our expectations for the year, which means that you would expect us to take our expectations for the pharma segment above that 4 to 6% range. And that's in a year where we have that. We also have this year some pretty significant headwinds related to lower COVID vaccine volumes. So we're managing through all that, just through absolutely terrific execution by the team.

And they've tripped up a lot of other companies I should mention because it's very special. Most of the companies here are trying to get people to look at their stock. Your stock is glaring that it's at 52 week high, not 52 week low. So I want to congratulate Jason Holler, CEO of Cardinal Health, who remember, lost his second largest customer and still beat the quarter and the year. Congratulations.

Thanks Jim.

I learned so much from the CEOs who joined us on the show today. And make sure to tune in tomorrow for another action packed lineup of guests, including the new mayor of San Francisco. I like to say there's always one market somewhere and I promise try to find it. Just for you right here. Midmoney. I'm Jim Cramer. See you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kremer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer clueless I'm Elliot Kaelin and I cannot wait to tell you all about the new podcast I'm.

[Gregory]

Hosting for Smartless Media.

[Jim Cramer]

It's called Smartless Presents Clueless, a bite sized twice weekly game show with a different main game and cliffhanger puzzle every single episode. And all this season, the contestant will always be Sean Hayes. That's the Clueless promise.

[Gregory]

Since you never know what the game.

[Jim Cramer]

Will be, you won't want to miss a single episode. Listen and follow wherever you get your podcasts.