5 December 2023
The big story in the healthcare industry continues to be the GLP-1 class of drugs—both approved and in clinical trials—prescribed to promote weight loss. New data released in November suggests these drugs may have far-reaching beneficial applications beyond weight loss.
Novo Nordisk A/S (held by the Fund) revealed data in November from a pivotal study supporting the efficacy of Wegovy in mitigating heart attacks and fatalities among patients with obesity and heart disease. The study, hailed as “game-changing,” garnered enthusiastic applause at the American Heart Association’s annual conference in Philadelphia. In addition to promoting weight loss, the highest Wegovy dose demonstrated notable reductions in blood sugar and inflammation, both key indicators of heart disease. These outcomes align with the substantial decrease in heart attacks in patients taking the drug reported by Novo Nordisk in August. The latest results suggest the benefits of incorporating Wegovy into treatment plans for high-risk individuals. As heart disease remains the leading cause of death in the U.S. and a significant global contributor, Novo Nordisk will seek approval for using Wegovy to diminish the risk of heart attack in overweight adults with heart disease.1
However, Novo Nordisk may be a victim of their own success. The company also announced in November that they expect shortages of related GLP-1 drugs Ozempic and Victoza to be acute in Europe toward the end of 2023, with Ozempic shortages continuing intermittently through 2024 and Victoza shortages lasting until at least the second quarter of the year.2
Such shortages could be good news for Eli Lilly, however. In early November, the FDA approved the weight loss drug Zepbound from Eli Lilly (held by the Fund) that helped patients in clinical trials lose up to 22.5% of their body weight within 16 months. These results outstrip any other weight loss drugs currently on the market and approach the weight loss seen after bariatric surgery. Zepbound also appears to increase how efficiently the body breaks down sugar and fat—which none of the other GLP-1-type drugs can do. Lilly expects Zepbound to be available in the U.S. by the end of this year.3
Company Specific Updates
Medtronic has received FDA approval for its Symplicity Spyral™ renal denervation (RDN) system to treat hypertension. The innovative and minimally invasive procedure involves delivering the Symplicity via a catheter inserted into the kidney artery and applying radiofrequency energy to overactive nerves that contribute to high blood pressure. The procedure leaves no implant behind. Medtronic will immediately commence commercialization following FDA approval. The Symplicity, approved in over 70 countries globally, is set to transform hypertension treatment in the U.S., providing a complementary solution to medication and lifestyle changes. This milestone marks a significant advancement in addressing high blood pressure, underscoring Medtronic’s commitment to innovative medical solutions.4
Also in November, Medtronic reported Q2 revenue of $7.984 billion, up 5.3% as reported and 5.0% on an organic basis. The company also increased its FY24 organic revenue growth projections (to 4.75% from 4.5%) as well as its EPS guidance.5
Pfizer reported a 42% decline in Q3 sales to $13.2 billion, falling short of the $13.5 billion Wall Street projection. This represents the company’s first adjusted quarterly loss in over 30 years, due in large part to steep declines in the sale of Paxlovid and the Covid booster shots.
But there are reasons to be optimistic about Pfizer, especially going into the new year. The $43 billion acquisition of cancer biotech firm Seagen Inc. gained unconditional support in the European Union, suggesting U.S. regulatory approval may come after relatively light scrutiny. Pfizer is also awaiting mid-stage clinical trial results later this year on its new obesity pill, danuglipron. Pfizer has also initiated early-stage trials for a new small molecule to treat Type 2 diabetes as part of its commitment to developing GLP-1-related compounds to tackle obesity.6
LIFE ETF: Investing in Global Healthcare
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Portfolio Strategy and Activity
For the month, Intuitive Surgical Inc made the largest contribution to the Fund, followed by Danaher Corporation and Medtronic Plc. The largest detractors to performance for the month were Bristol-Myers Squibb Co, followed by Gilead Sciences Inc and Vertex Pharmaceuticals Inc.
- Muller, M. & Kresge, N,. “Wegovy Study Bolsters Use In Patients With Obesity and Heart Disease,” Bloomberg, November 11, 2023; https://www.bloomberg.com/news/articles/2023-11-11/wegovy-weight-loss-drug-may-also-treat-heart-disease-study-shows
- Kresge, N., “Novo Sees Ozempic Shortages Continuing Next Year in Europe,” Bloomberg, November 21, 2023; https://www.bloomberg.com/news/articles/2023-11-21/novo-sees-ozempic-shortages-continuing-next-year-in-europe
- Lovelace Jr., B., “FDA approves weight loss drug from Eli Lilly that helped people lose up to 52 pounds,” CNBC, November 8, 2023; https://www.nbcnews.com/health/health-news/eli-lilly-weight-loss-drug-zepbound-fda-approval-ozempic-rcna123169
- “Medtronic announces FDA approval of minimally invasive device to treat hypertension,” Medtronic, November 17, 2023; https://news.medtronic.com/2023-11-17-Medtronic-announces-FDA-approval-of-minimally-invasive-device-to-treat-hypertension
- “Medtronic reports second quarter fiscal 2024 financial results,” Medtronic, November 21, 2023; https://news.medtronic.com/2023-11-21-Medtronic-reports-second-quarter-fiscal-2024-financial-results
- Cattan, N. & Koons, C., “Pfizer’s Sales Fall Short as Covid Continues to Haunt,” Bloomberg, October 31, 2023; https://www.bloomberg.com/news/articles/2023-10-31/pfizer-third-quarter-sales-miss-estimates-on-covid-downturn