The incredible power of the weight-loss drugs; Lessons from my whiff on Eli Lilly; Weight-loss drugs have potential beyond just weight loss; My friend Rich Weil's comments on the drugs

February 26, 2025

1) Longtime readers know that I've covered the incredible weight-loss drugs many times over the years...

I'll admit to being a little obsessed at one point, writing 13 times about these drugs in 14 months from September 2022 through November 2023 versus only four times since February 2024 (I've included links at the end of today's e-mail, which I recommend new readers check out).

But I remain convinced that they're game changers that are quickly improving the quality of life for millions of Americans – and tens of millions more would also benefit.

Roughly 42% of adult Americans are obese (about 9% severely so) and another roughly 31% are overweight. Put simply, it's a crisis that's severely affecting the health and quality of life of nearly three-fourths of Americans.

These new drugs are having impacts that are nothing short of miraculous. More than a dozen of my good friends are on them – one of whom has lost more than 100 pounds and is a new man.

I've said previously that I think the U.S. government should negotiate hard with the manufacturers to get the price down – and then make these drugs widely available to any American who is overweight. I think the upfront cost will be more than offset by long-term savings.

Meanwhile, here at Stansberry Research, my colleague Ken even went on camera to share his own experience with a weight-loss drug...

Like so many others, it's an emotional story. For years, Ken struggled with binge eating and obesity. He once weighed more than 300 pounds, had a serious drinking problem, and suffered from sleep apnea and sciatica.

But then, he started taking one of the weight-loss drugs – as he says, it was "like someone had flipped a switch."

He didn't lose the weight overnight, of course... but, he says, "the change was immediate."

Don't take my word for it, though... Hear it directly from Ken (with a nice introduction from our company's publisher himself) right here.

2) Amid all my coverage of the weight-loss drugs over the years, there's also an investing lesson here...

When I first wrote about these drugs in September 2022, I focused on Mounjaro (tirzepatide). As I wrote at the time, it "seems to have fewer side effects (mostly gassiness) and results in the greatest weight loss."

The drug is made by Eli Lilly (LLY). So in that same e-mail, I took a look at the stock and concluded:

So should you buy Eli Lilly? I'm tempted, but the stock has tripled over the past three years and is up sevenfold over the past decade:

Eli Lilly now trades at 10 times revenue, nearly 30 times trailing EV/EBITDA, 48 times trailing earnings, and 34 times expected earnings over the next year.

This is a great company with a bright future – especially with Mounjaro – but those are some very rich multiples... so I'm not a buyer today. That said, I wouldn't argue with anyone who wanted to establish a starter position on the thesis that trailing 12-month revenue is $29 billion, and Mounjaro alone could equal that.

But I'm going to stay on the sidelines for now and hope for a pullback...

It was a bonehead decision. Eli Lilly has nearly tripled since then – this chart shows the massive surge:

It's frustrating to have correctly identified an obvious, huge, long-term trend and the company best poised to benefit from it – but then to have gotten scared off because of short-term valuation metrics.

As I've written countless times, the key to long-term investment success is being clever or lucky enough to have a couple of big winners in a portfolio of 10 to 20 stocks – generally market leaders riding big waves – and then holding them for years (or even decades).

Think Costco Wholesale (COST) with warehouse clubs, Netflix (NFLX) with streaming videos, Meta Platforms (META) with social media, Visa (V) with credit cards, Apple (AAPL) with smartphones, Walmart (WMT) with supercenters, Nvidia (NVDA) with AI, or McDonald's (MCD) with fast food.

Lilly was a clear example... but I was too much of an old-school value investor to pay a nosebleed price for it!

3) One of the reasons that investors are so bullish on this sector is that more evidence is emerging every month about these drugs' astounding benefits beyond weight loss...

This New York Times article from the end of January highlights one such example: To Protect Against Alzheimer’s, Researchers Look to Weight Loss Drugs. Excerpt:

One recent analysis found that, over the course of three years, people taking semaglutide (the compound in Ozempic and the weight loss drug Wegovy) were about 40 to 70 percent less likely to be diagnosed with Alzheimer's disease compared with people on other diabetes medications.

A paper published this month reviewing a Veterans Affairs database similarly found that people prescribed these drugs were less likely to develop dementia compared with those who took other diabetes drugs. The benefit was more modest, though, with a roughly 10 percent decreased risk.

However, as my friend Dr. Kevin Maki – whom I've turned to many times over the years for more insights on these weight-loss drugs – told me in a private e-mail:

These results are encouraging but enthusiasm should be tempered until we have findings from randomized clinical trials. The potential Alzheimer's disease risk reduction is biologically plausible. I believe that some results from one of the ongoing trials are due out this year. It will be big news if they show a reduction in dementia risk or a slowing of the decline in cognitive performance. Many other interventions that have looked promising in observational studies have not proven to provide the hoped for benefits, although some have. Time will tell.

4) This recent Washington Post article captures how the miraculous weight loss drugs have transformed the life of one man – and the broader implications: Weight-loss drugs aren't just slimming waists. They're shifting the economy. Excerpt:

Chicago trial attorney John Drews, like many well-employed Americans, has always given himself a generous discretionary spending budget. As a divorced empty-nester, his purchase priorities, in no particular order, included Scotch, chocolates, pretzels, eating out and beach resorts.

Then, in May 2022, following reports by celebrities and influencers about blockbuster weight-loss drugs, he decided to go on one himself, and everything changed.

He lost 25 pounds the first year, then 75 pounds more the following year. Afterward, Drews says, he didn't just feel like a different person. He basically was one – with food, clothing, workout and vacation habits that have almost completely overridden everything he used to spend his money on, to the tune of more than $100,000 annually.

"It's a whole new life," Drews said.

The article goes on to highlight the broader implications:

[Drews] is just one consumer. But multiply his experience by the roughly 16 million people – that's 6 percent of American adults – taking GLP-1 weight-loss drugs, and their collective purchasing power has the potential to profoundly reshape the economy in the coming years.

There's evidence that the demographic of people on the drugs overlaps with those who like to spend, a group some analysts have dubbed "over consumers." Cutting their daily calorie counts in half – or more – is resulting in all sorts of interesting consequences still coming to light.

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.

P.P.S. For readers who want a deeper dive, my friend Rich Weil of Transformation Weight Control sent me the below e-mail and kindly gave me permission to share it...

I believe the bias against anti-obesity medications in this country amongst the lay population and the medical community stems from a deep-seated societal bias against patients with obesity.

People ask, "Why do they need to take a medication to lose weight, just eat less and exercise more?" They blame patients with obesity for their disease because of lack of self-discipline or lack of will power.

I have never once in my career heard someone say, "Be careful about taking that anti-hypertensive medication for life, or be careful about taking insulin for life." Only obesity drugs.

I have 44 years of experience in this field. I have seen the human suffering. Obesity is a chronic disease and therefore requires chronic treatment. It is an addiction to food for many. So why are we loath to support GLP-1s, which are finally providing much-needed relief and restoration of normal appetite regulation?

Many ask, rightly so, what is the 10- or 20-year risk of taking a GLP-1? Well, there is an answer to that.

The first GLP-1 was developed in 2005, Byetta (exenatide), 20 years ago. I am a Certified Diabetes Educator, one of the first in the U.S., going back to the late 1980s. I have been in more staff meetings about patients with diabetes than I could even begin to count in four decades. Thousands and thousands. I don't recall even once in all those years a report of a patient having a serious, life-threatening adverse event due to exenatide, and certainly not death. I've heard the side effects, which are manageable with other meds, [over-the-counter] or Rx, and dietary approaches. Most side effects are moderate and tend to pass. I've never once heard of the possibility of removing exenatide from the market.

So in fact we have 20 years of data and experience with GLP-1s, which is far more than many newer drugs that have only been on the market a few years. Yet I never hear the argument about what's going to happen 10 or 20 years from now about someone taking one of these newer drugs. Only anti-obesity medications.

I have a PowerPoint presentation about GLP-1s with over 500 slides of the benefits of GLP-1s to virtually all organs and many body systems. New data comes out every week about the benefits, from male fertility to treatment of chronic heart failure. They reverse fatty liver disease, prevent the conversion to diabetes in patients with overweight, obesity, and pre-diabetes by an unheard of and staggering 94%. The Diabetes Prevention Program didn't come close. GLP-1s reduce heart attacks by 23%. The list goes on and on and on. I can hardly keep up.

As for the supposed risk of thyroid cancer, the European Medicines Agency, Europe's [Food and Drug Administration], says they find no causality between GLP-1s and thyroid cancer. Every paper about the risk of GLP-1s concludes the same thing: that the risk of chronic obesity far outweighs the risk of GLP-1s.

It's important to keep in mind that, whatever the possible risks of GLP-1s are, they pale in comparison to the certain and devastating impact of obesity: type 2 diabetes; high blood pressure; heart disease; atrial fibrillation; stroke, metabolic syndrome; fatty liver disease; breathing problems such as asthma and sleep apnea; osteoarthritis; gout; gallbladder diseases; pancreatitis; chronic kidney disease; fertility problems including lower sperm count and sperm quality, and ovulation problems; pregnancy problems including gestational diabetes, preeclampsia, and a possible increased risk of a C-section; menstrual irregularities and polycystic ovary syndrome; idiopathic intracranial hypertension; erectile dysfunction; mental health problems including depression, dysthymia, body dysmorphia, low self-esteem, and disordered or binge eating disorders; and at least 13-obesity related cancers.

In fact, a paper was just published in 2024 in JAMA Network showing that in diabetic patients, use of GLP-1s was associated with a significant reduction in risk of 10 of 13 obesity-related cancers including esophageal, colorectal, endometrial, gallbladder, kidney, liver, ovarian, and pancreatic cancer as well as meningioma and multiple myeloma.

For most of my 44 years, I was never very high on weight-loss meds. I lived through fen-phen, rimonabant, and other drugs that were removed from the market, just like Rezulin for diabetes.

But the current GLP-1s are game-changers – and likely to get better. Others with multiple mechanisms of action, even more than tirzepatide, are in the pipeline. Have you read preliminary data from studies of retatrutide or MariTide? Once a month administration, or even less, without a plateau in 52 weeks, and weight results better than tirzepatide. Even single doses of some of these new drugs in phase 1 or 2 studies lead to four months of weight loss.

Regarding the argument that many people go off the GLP-1s and regain the weight, [never] once in my career have I heard this argument about any other class of drugs.

If you discontinue lisinopril, a patient's blood pressure rises again, and if they discontinue insulin, or some other anti-diabetes agent, their glucose and A1C rises again. But only with obesity meds do we argue not to use them because if you stop the drug the weight comes back on. I genuinely fail to see the difference between treatment of chronic diseases such as diabetes and hypertension, and the chronic disease of obesity. But again, it stems from an intrinsic bias against patients with obesity. I wrote about this here: Weight Loss Medication Bias – A Letter to the Editor

More needs to be learned about GLP-1s, but [there] is no question in my mind that they are truly game-changers. I would invite you to attend my weight loss medication support group to hear the relief of patients who have struggled all their lives with obesity, and suddenly they are losing weight like never before, reaching new and lower set points, and their appetite regulation has normalized.

Thank you for the extra insight, Rich!

And as I mentioned earlier, for context on my past discussions on the weight-loss drugs, here are links to my previous e-mails covering them: