Reader feedback on Meta Platforms, On, Eli Lilly, and Novo Nordisk
Today, I'd like to share some insightful feedback from readers about topics in my past few e-mails, as well as some responses...
1) In Monday's e-mail, I discussed Meta Platforms' (META) new AI agent, Muse. And I invited readers to share their experience using it. Andrew L. said:
There is one glitch Muse kept running into: Whenever I asked it to check websites (in my case, airline websites to check award seat availability – since it takes enormous time to do so on my own), the websites refused access to Muse, since they must have noticed that it's a bot (I could verify this because when I signed in myself on my PC, it worked fine).
This reflects the current tension that percolates between platform companies like Amazon and AI agents, where the platforms/websites are closely controlling access by AI agents. Without this getting resolved, I suspect Muse's utility will be severely limited as a personal AI assistant.
I forwarded Andrew's feedback to my friend who's an expert on Meta. He confirmed that this is an issue for Muse:
In some cases, you have to work through glitches (like with the airline websites), or in some cases, they're banned (like with Amazon because they want the ad/referral traffic revenue).
It's going to be an arms race for a while. But I believe the consumer will intimately vote, and they will choose sites that make their lives easy. Then Darwinism will kick in. It's already happening: Shopify, for instance, is allowing Muse.
Not all bots are evil, and it's easy to permit the good ones.
I haven't tried Muse yet, but I'll keep this in mind when I do...
2) In yesterday's e-mail, I shared an update on shoemaker On (ONON) and two readers' thoughts on the company. One reader, Scott W., had concluded:
Bottom line, the risk is that On is another fad apparel stock – terrific styling but questionable features. That's my concern, beyond the premium pricing. It can't afford for people to sour on wearing them over time. And I think they've had senior management turnover in recent months – that is also not a great sign.
In response, Frank K. shared his experience with On's shoes:
This is purely anecdotal, but I agree with your friend Scott W. I bought a pair of On running shoes last winter using a 20% off coupon at Dick's Sporting Goods. I thought the cushioning was inadequate and not as good as my current pair, which really surprised me! I rarely do this, but I ended up returning them and lost the benefit of that 20% coupon.
I forwarded this to Scott, who commented:
We know that a few anecdotes aren't data. But the issue is whether On knows and acknowledges the lack of cushioning problem. I've seen no evidence of that.
I see that pro athlete Kylian Mbappé has officially signed a major 10-year endorsement partnership with On, ending his nearly 20-year relationship with Nike, which marks On's official entry into the football and soccer cleat market. This move is potentially huge, but also risky if they have some underlying issues they haven't fixed – and puts them head-to-head with giants like Nike and Adidas.
Like I noted yesterday, I think these are valid concerns.
3) Also in yesterday's e-mail, I shared a debate on weight-loss-drug titans Eli Lilly (LLY) – maker of tirzepatide (Mounjaro/Zepbound), orforglipron (Foundayo), and the upcoming retatrutide – and Novo Nordisk (NVO) – maker of semaglutide (Ozempic/Wegovy).
Clay L., a family physician who runs one of the largest physician practices in a southern state, wrote that Lilly's drug is preferred:
You are correct, tirzepatide is by far a superior compound to semaglutide. I've been using GLP-1s for years and they are totally different chemicals. Ozempic is much harder to tolerate for most and works by limiting calories, which causes patients to lose a ton of muscle – that's where "Ozempic face" and "Ozempic butt" come from. It's rare that I see that kind of muscle loss with tirzepatide. So we quit using Ozempic a couple years ago.
Retatrutide and other next generation GLP-1s seem to be even better with more weight loss and fewer side effects. They will likely make the two current ones obsolete.
Roy W. shared his great experience switching from Ozempic to Mounjaro, as well as his success with Lilly's stock:
I have not been excessively overweight for a while, but at 5'8" and over 200 pounds, I qualified as obese. In addition, I got back some discouraging blood work a couple of years ago and decided that I needed to be more aggressive. (I also had a triple bypass about four years ago.)
My primary care physician and I decided I should try Ozempic and, while it gradually lowered my weight, it also caused me to have an unacceptable degree of diarrhea, so I stopped taking it. I then started to regain the weight I'd lost (no surprise), so we eventually decided to try Mounjaro. My blood work improved dramatically and my weight is now down about 30 pounds. I am very happy with all of my results.
By the way, in response to a write-up you did about Eli Lilly, I bought nearly $100,000 of LLY four or five months ago. I'm pleased to see that the stock has slowly turned positive and I look forward to the investment growing. Thank you.
Anthony L. has a similar story of switching from Ozempic to Mounjaro, but he thinks I'm not fully appreciating Novo's new Wegovy pill:
I am a diabetic and was on Ozempic for at least three years before I had to take steroids for another medical issue, at which point the Ozempic was no longer effective and my doctor switched me to Mounjaro, which was effective.
But I think your discussion misses the most important point: Both LLY and NVO have introduced pill versions of their respective drugs, and the NVO pill (Wegovy) is about 1.5 times more effective than the LLY pill (Foundayo). I don't think that the superiority of NVO's pill is reflected in its stock price.
The introduction of respective pills may not mean that much for diabetics, most of whom are used to injections as they need insulin, which is almost entirely by injection. However, for weight loss, many are averse to injections. The other issue is that the injectables need to be refrigerated, which makes their use impractical in some circumstances.
Regarding the stock, he said:
I have no opinion on LLY shares. It's a great company, and shorting shares in great companies doesn't usually end well. However, I think that the Wegovy pill is likely to be a great product and that this is not being reflected in the price of NVO shares.
I agree that many users will choose pills for reasons of cost, convenience, lack of need for refrigeration, and aversion to injections. And he's right that Novo's Wegovy pill has had impressive sales since its early January launch. It currently accounts for about 35% of total Wegovy prescriptions.
But Foundayo is coming on strong since its launch in early April. The latest data shows that it has 21% market share, double what it was in early July. And Lilly says Foundayo is now capturing more than 30% of new U.S. patients starting oral weight-loss medicines.
Oral Wegovy results in slightly more weight loss than Foundayo (though not 50% more) – 14% of body weight versus 11% on average. (Note that both of these numbers are well below that 20.2% of body-weight average loss for those on tirzepatide.)
Offsetting this advantage, however, is the fact that the Wegovy pills have to be taken on an empty stomach, with a 30-minute wait before eating or drinking. There are no such restrictions for Foundayo.
Also, because less than 1% of the oral dose of Wegovy reaches the bloodstream, the pill requires more than 70 times the amount of active ingredient as the injectable version. So as sales of the pill grow, it might hurt Novo's margins.
Lastly, I think investors are very aware of all this, and it's reflected in Novo's stock price.
Jim S. shared concerns about a specific side effect of GLP-1 drugs:
I failed to see any mention of the vision-destroying side effect, non-arteritic anterior ischemic optic neuropathy ("NAION") – often referred to as an "eye stroke" – in your daily. There is a warning on labeling outside the USA but not here. This Wall Street Journal article mentions the occurrence as "2 in 10,000." I am not a math major, but that works out to 1 in 5,000. How many millions of our citizens use these drugs?
I think the companies are morally obligated to update their product literature to include this side effect. Not doing so is misleading patients and investors.
The reason I didn't mention this side effect – and why it's not on the drugs' warning label – is that it's very unlikely that semaglutide (the GLP-1 that was studied in this case) causes an increase in NAION.
The 2024 study Jim is referring to asked: "Are prescriptions for semaglutide associated with an increased risk of [NAION] in patients with type 2 diabetes or patients who are overweight or obese?"
The answer: "The findings suggest a potential risk of NAION associated with prescriptions for semaglutide, but future study is required to assess causality."
The second part is the key line because of the difference between correlation and causation. This wasn't a double-blind, randomized study, which is the gold standard.
Rather, it was based on observational findings, which can be complicated by "confounding by indication" – meaning patients who are prescribed semaglutide already carry higher baseline vascular risks for NAION due to underlying obesity, diabetes severity, and cardiovascular disease.
To understand this, imagine they did a study of people who bought nicotine gum and observed that these people had a higher incidence of lung cancer. Did the gum cause a higher incidence of cancer, requiring a warning label about this? Of course not, because most people who buy nicotine gum are smokers!
It's no surprise, therefore, that a later "matched cohort study" concluded: "No NAION risk difference was found in those on semaglutide vs matched controls."
I'm also comforted by the fact that there hasn't been any material change in the incidence of NAION even as the number of GLP-1 users for weight-loss purposes has soared to 11% of the U.S. adult population.
Fabian H. also shared concerns about GLP-1 drugs, but from a different perspective:
I stay away from them because I think that tobacco lawsuits are going to be a walk in the park in comparison to what is going to happen with these medications. No pain, no gain? No free lunch? Don't mess with mother nature...
Morphine and cocaine were freely sold to the public at the beginning of the 20th century and people loved it – all worries, fatigue, cough, whatever... gone!
I think we are in the same framework here.
I totally disagree and believe these are miracle drugs that just about everyone will be on in a few years. I think even people who don't want/need to lose weight will be taking them – though perhaps only at microdosing levels – for their other health and longevity benefits.
I sent him these thoughts, and he replied:
Future will tell, but I prefer diet and exercise. There are enough "funky" things in our food already, so I avoid drugs.
Only a tiny percentage of overweight and obese people who try to lose weight via diet and exercise are successful in losing a material amount and keeping it off long term.
For example, a 2015 study of nearly 280,000 people in the U.K. showed that the annual probability of an obese person reaching a normal body-mass index was about 1 in 210 for men and 1 in 124 for women.
Plus, foods have been engineered to be incredibly addicting. I believe GLP-1 drugs could be a "vaccine" against the chemical warfare that has been waged against us by fast-food and processed-food companies.
I continue to favor Lilly's stock over Novo's, which is why my team and I recommended it in our June issue of Stansberry's Investment Advisory.
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Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.