In a testimony before the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), the CEO of Eli Lilly & Co., Dave Ricks, pledged not to raise prices on the company’s existing insulin products in response to calls for the drug to be more affordable.

Novo Nordisk CEO Lars Fruergaard Jørgensen said his company would limit price increases to “single digits,” while Sanofi CEO Paul Hudson highlighted his company’s “responsible pricing policy” and the falling net price for Sanofi’s insulin products.

All three companies have faced years of political pressure to make insulin more affordable and, in March, agreed to begin price reductions in Q4 of this year. Together, the three companies (all held by the Fund) control more than 90% of the global insulin supply.¹

The power of AI-driven innovation continues to show itself in the healthcare and pharmaceutical space. In May, researchers at McMaster University announced they had used AI to discover a potent new antibiotic, called abaucin, that can kill a deadly superbug known as Acinetobacter baumannii.

The researchers trained an AI to recognize the chemical structure of thousands of known pharmaceuticals and how they interacted with A. baumannii. They then provided the AI with a list of 6,680 compounds whose effectiveness against the bacterium was unknown. The AI worked up a shortlist of 240 promising potential drugs from those thousands of compounds in just an hour and a half. Studying the candidates on that shortlist, scientists found nine likely antibiotics, including abaucin.

Identified by the World Health Organization as a “critical” threat, A. baumannii is resistant to multiple antibiotics, can survive on surfaces and medical equipment, and can infect wounds and cause pneumonia. With more than a million people dying each year from antibiotic-resistant bacterial infections, the use of AI in scientific research holds the promise of accelerating the discovery of new therapies, potentially saving lives. While abaucin requires further testing, the researchers say they expect the first AI-derived antibiotics to be prescribed by 2030.²

Updates on Specific Healthcare Companies

Novo Nordisk A/S

Novo Nordisk announced in May that unprecedented U.S demand for its obesity drug Wegovy meant the company would be limiting the supply of starter doses so it can ensure availability of the drug for existing patients.³ News of the supply cut came on the heels of Novo Nordisk’s forecast-beating Q1 sales increase—up 27% year-over-year—which was largely due to the sales of their weight loss and diabetes drugs.⁴

Pfizer Inc.

Results of a peer-reviewed phase two clinical trial were released in May, showing that a twice-a-day oral weight loss drug from Pfizer, called danuglipron, resulted in comparable weight loss to Novo Nordisk’s once-a-week injection, Ozempic. In a trial of 411 adults with Type 2 diabetes, participants receiving the danuglipron pills showed statistically significant weight loss after 16 weeks versus those taking a placebo. A daily oral treatment for weight loss could have an advantage in the marketplace over other therapies that require frequent injections.⁵

Danuglipron, Wegovy, and Ozempic are all GLP-1 drugs (glucagon-like peptide-1 agonists), and in May, Barclays forecasted that this class of drugs meant to treat obesity and control weight could be worth as much as $200 billion within a decade.⁶

Investing in Global Healthcare: LIFE

Investing in ETFs can be one way to add cutting-edge healthcare to your portfolio.

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk.

Portfolio Strategy and Activity

For the month, Eli Lilly & Co made the largest contribution to the Fund, followed by Intuitive Surgical Inc and Roche Ltd. The largest detractors to performance for the month were Medtronic Plc, followed by Stryker Corporation and Abbvie Inc.

For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

 

Sources:

¹Constantino, A.K., “Eli Lilly CEO vows not to raise insulin prices again, while Novo Nordisk and Sanofi hedge,” CNBC, May 10, 2023; https://www.cnbc.com/2023/05/10/eli-lilly-novo-nordisk-sanofi-ceos-on-insulin-prices.html

²Gallagher, J., “New superbug-killing antibiotic discovered using AI,” BBC News, May 25, 2023; https://www.bbc.com/news/health-65709834

³Gilchrist, K., “Novo Nordisk cuts some U.S. supply of Wegovy obesity drug as demand soars,” CNBC, May 4, 2023; https://www.cnbc.com/2023/05/04/novo-nordisk-cuts-some-supply-of-wegovy-drug-amid-soaring-demand.html

⁴“Novo Nordisk (NVO) Q1 Earnings In Line, Sales Miss, View Up,” Nasdaq, May 4, 2023; https://www.nasdaq.com/articles/novo-nordisk-nvo-q1-earnings-in-line-sales-miss-view-up

⁵Constantino, A.K., “Pfizer oral weight loss drug may be as effective as Ozempic injection by Novo Nordisk, study says,” CNBC, May 22, 2023; https://www.cnbc.com/2023/05/22/pfizer-weight-loss-drug-compares-to-ozempic-by-novo-nordisk.html

⁶Gilchrist, K., “Novo Nordisk cuts some U.S. supply of Wegovy obesity drug as demand soars,” CNBC, May 4, 2023; https://www.cnbc.com/2023/05/04/novo-nordisk-cuts-some-supply-of-wegovy-drug-amid-soaring-demand.html

 

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