Following President-elect Trump’s choice of Robert F. Kennedy Jr. to lead the Department of Health and Human Services, stocks of companies that make or are creating the new class of drugs for diabetes and weight loss fell sharply on Friday.
Kennedy is against GLP-1 drugs because he thinks they are not the best way to deal with the fat problem. He has said that instead of drugs, which cost thousands of dollars, the government should encourage people to eat well. This would cost a lot less.
Novo Nordisk B.V. (NVO) and Eli Lilly & Co. Inc. (LLY -3.68%).
NOVO.B -5.36%, the two biggest names in GLP-1s, are trying to get more insurance companies to cover the drugs. They have also been looking into how they can help with things other than weight loss, like treating heart disease and sleep apnea.
Kennedy reportedly says that the rise in chronic diseases is due to bad food, medicines that aren’t needed, like some vaccines, and water that has fluoride added to it.
A lot of people in the U.S. have chronic diseases, he has said in talks. Seventy-five percent of Americans are overweight or fat.
Kennedy comes from what is probably the most famous family in Democratic Party politics. He doesn’t have a health degree or any other official training, but he made healthcare and what he sees as flaws in the U.S. system a central part of his campaign for president.
Kennedy doesn’t like the pharmaceutical business and thinks Americans are too dependent on drugs like GLP-1s, according to a note sent to clients by Raymond James analyst Chris Meekins on Friday.
Friday, shares of Eli Lilly were down 3% and shares of Novo Nordisk that are traded in the U.S. were down 3.5%.
Other companies that are working on weight-loss drugs also saw their stock prices drop.
The stock of Viking Therapeutics Inc. VKTX -5.39% went down 2.8%. This business shared information in early November that its oral weight-loss drug did better than expected in a Phase 1 study.
At the moment, the GLP-1 drugs are given through injections. However, an oral form would likely be a big deal for whichever company can make it first, since it would be much easier to use and would likely appeal to people who are afraid of needles.
There was a 4.7% drop in Amgen Inc. AMGN -4.78%. Amgen is working on a new drug called MariTide. This week, a Cantor Fitzgerald analyst found data from a Phase 1 study that suggested the shot might be linked to a loss of bone mineral density. This was disappointing news for investors who were waiting for data from a Phase 2 trial.
Amgen said in a statement that it does not believe there is a connection between MariTide and changes in bone mineral density.
The company said, “The Phase 1 study results do not raise any concerns about bone safety and do not change our faith in MariTide’s promise.”
Amgen plans to share results from the Phase 2 study by the end of this year.
The price of Structure Therapeutics Inc. stock GPCR -6.92% went down 5.9%. This quarter, that business plans to start a Phase 2 trial of GSBR-1290, an oral GLP-1 drug. Structure said in June that after three months, people who took the drug in a clinical study lost an average of 6.2% of their body weight.
The share price of Scholar Rock Holding Corp. (SRRK -1.96%) fell by 3%. Two drugs being made by that business are meant to keep the lean muscle that is lost when people lose weight quickly.
The company’s new drugs apitegromab and SRK-439 are the best of a group of treatments that are being tested. They target myostatin, a protein that stops muscles from growing, which could help people keep their lean muscle mass.
The stock price of Zealand Pharma, ZEAL -10.11%, fell 8.5%. That company is developing an experimental drug called petrelintide, which is an amylin analog — a type of drug that has been shown to improve feelings of fullness and may have fewer gastrointestinal side effects than GLP-1s.
The stock price of Terns Pharmaceuticals Inc. TERN -6.60% was down 5.5%. Terns is also working on an oral weight-loss drug. He said that a Phase 1 study showed that the drug caused people to lose up to 5.5% of their body weight over 28 days.
