Nov 11th, 2023 – This week AstraZeneca has entered into the obesity drug market by acquiring ECC5004, an experimental weight-loss pill, sparking competition with Eli Lilly and Novo Nordisk. Although AstraZeneca’s move initially impacted Eli Lilly’s stock negatively, the company maintains a first- mover advantage with a more sophisticated obesity pill in development. The GLP-1 drug market, known for blood sugar control and weight loss, is lucrative, and Eli Lilly’s robust pipeline, including orforglipron, is highlighted. Analysts frame the competition between Eli Lilly and Novo Nordisk as a “market-creation” dynamic, possibly leading to a structural duopoly in the obesity drug market. Eli Lilly’s confidence in treating Alzheimer’s further enhances its positive outlook. Investors may experience short-term fluctuations in both companies’ stocks due to increased competition, but long-term prospects hinge on effective navigation of the evolving market and capitalizing on growth opportunities. Monitoring developments, regulatory approvals, and market sentiment is crucial for informed investment decisions.
Another interesting theme to explore is that of the current inflation predictions.
San Francisco Federal Reserve President Mary Daly expressed cautious optimism about the future impact of the ongoing tighter monetary policy: it is true that it is helping slowing down the pace of inflation but premature assumptions may be too risky at the moment. Indeed, Federal Reserve Chair Jerome Powell declared officially the lack of confidence policymakers have in the policy’s ability of bringing inflation down to the 2% target.
The rates the FED is holding in place for the second meeting in a row, the target is in a range between 5.25% and 5.5%, are not only the highest in 22 years but are apparently leading to positive outcomes in the control of the inflation level. Notwithstanding from that, Daly remarked the uncertainty of the future outlook by stressing the importance of adjusting the policy making process to the incoming data.
Authors: Simona Merlo and Ilaria Savignoni