Chaos and Mayhem – US Tech
24. November 2025
Tian Xuan Zhou (Oliver)
Student, New European College – Munich
Born and raised in Hong Kong, what happened on Wednesday was devastating, truly heartbreaking. To those who lost their lives in the fire, may you rest in peace, and watch over your loved ones, and those that lost their homes in this tragedy. May many more lives be saved in the coming days.
This photo taken on Nov 29, 2025 shows flowers placed near the site of the residential building fire to mourn the victims in Tai Po of Hong Kong. [Photo/Xinhua]
As if last week was punching way above my weight, this week is no different. In my opinion, one of the if not the hardest sectors to write about is pharmaceuticals and healthcare. I was very fortunate to have seen the work of very capable and smart analysts talk and write about this sector. Therefore, I have some sort of idea about this sector and hopefully I kind of know what I am talking about, but do take this week’s article with a grain of salt.
April 15th 2025, the White House has released an executive order by President Trump – Lowering Drug Prices by Putting America First. Calling drug makers to peg prices to the lowest charged in other developed/rich countries. “Most favoured nation” pricing as Mr. Trump likes to say. So far this has been signed by pharma giants Eli Lilly and Novo Nordisk.
As far as I know, the street is focused on obesity drugs and their development. The biggest names, as mentioned before, will be Eli Lilly, Novo Nordisk. Two of the largest producers of GLP-1 agonists[1] – Wegovy, Ozempic by Novo and Tirzepatide drugs by Lilly. Last year, figures show that globally, $54 billion dollars are spent on GLP-1 drugs alone, a number that is set to rise in the coming years. More so than ever, in America.
Although government data[2] shows that obesity has reduced over the years, the broader and more surveyed data sets, such as the BRFSS[3] has shown that the rate of change was largely flat and unchanged. These data sets are tricky in my opinion, especially the recent data sets. GLP-1 is not new, however the effects take time and development of the drug over the years enhances its effectiveness. Who’s to say that the reason for the government data is due to the effects of (newer gen) GLP-1 taking its effect within the population?
With that in mind, we go back to the deal between President Trump’s administration with Novo and Lilly, which should cut and cap the prices of GLP-1. Wegovy, for example, prices are being slashed to $349 per month from $499 per month and patients may access doses. In an effort to make weight loss drugs more accessible for Americans, we are not even going to discuss private health care coverage as it is irrelevant. These people can easily afford the pre-cut $499 a month. However for Medicare and Medicaid, a completely different story.
Starting in 2026, Medicare GLP-1 will be $50 per month… ONLY IF you are eligible. Let’s be serious, if GLP-1 was $50 per month, huge doubts that Novo and Lilly would have signed such a deal. This coverage doesn’t apply to all Medicare beneficiaries, reports suggest that only a targeted subset of Medicare beneficiaries with BMI + comorbidity criteria are covered. More so historically, Medicare has been prohibited from covering weight loss only drugs. Suddenly, the $50 per month just looks unobtainable, not unaffordable, unobtainable. That is not to mention that Medicaid completely prohibits covering drugs solely for weight loss.
But what interests me the most between the two, were their YTD stock price movements, which could not be more night and day. As of writing on the 21st November, Eli Lilly’s YTD performance, +34.65%, whilst Novo sits at an abysmal -44.33%. With the wider XBI index[4] sitting at +25.21%. Safe to say that the biotech industry is performing well, just not Novo. Although this can be easily explained.
The slowdown of GLP-1 growth and the increase in competition between Lilly and Novo (although it seems there is some sort of gentleman’s agreement between the two dominant GLP-1 suppliers to coexist as a duopoly). Wegovy’s third quarter GLP-1 growth rose 18% YoY, seems positive, but a far cry from their second quarter YoY growth of 67%, whilst Ozempic slowed down from 15% growth to 3% growth between the second and third quarter. This has led to Novo cutting their full year guidance multiple times in 2025. When compared to the guidance at the start of the year, sales growth has been slashed from ~16%‑24% to ~8%‑14%, whilst operating profit growth has been slashed from ~19%‑27% to ~10%‑16%.
What the street will be most anticipating are the next gen GLP-1 drugs – CagriSema by Novo, Orfroglipron (this is an oral pill not injectable) and Retatrutide by Lilly. CagriSema and Orfroglipron are currently still in phase 3 trials and Retatrutide in phase 2 trials, all three expecting FDA approval, as they are prioritising and granting national priority vouchers for pharma that are making commitments to significantly lower drug prices.
Was the price movements justified? I think a little exaggerated. When compared to Lilly, whose guidance was more or less the same as the start of the year if not slightly raised. I see Lilly as being slightly overvalued, and Novo’s long term potential being underappreciated. Since CagriSema is an injectable, it can be easily targeted in different areas for patients, compared to Orfroglipron being an oral pill, therefore the average weight loss of an individual on CagriSema will be higher than those on Orfroglipron. But do note that Lilly’s developing injectable Retatrutide outperforms CagriSema in weight loss but only on higher doses so far, however since it still has to undergo phase 3 trials, expect the release of the drug to be two to three years even on fast track. It is also not to say that Orfroglipron will sell worse than CagriSema, as consumers may pick an oral pill simply due to the fear of needles.
Therefore, I favor Novo Nordisk, not only that CagriSema has high potential to beat out Orfroglipron in performance, but also recent stock price movements favors bottom fishing. Novo saw shares fall 11% on the 24th November alone, after trial results failed show a delay of Alzheimer’s progression, which is also a factor as Novo has set their sights to slow down patients’ cognitive decline by at least 20%. The sector as a whole has also seen huge inflows as it led all sectors within the S&P, therefore funds are actively buying into these stocks especially when institutions veered away from tech stocks earlier this month.
Reflection – So… as I have mentioned last week, no crash yet. Success for now. It seems that several strong sets of results from megacaps have sunk the hopes of the bears[5] for now. As for NVDA, the continuous underperformance was widely expected by the street I would imagine. I already had in my notes as of December last year – market share is way too high, expect it to dwindle down as other competitors catch up. The first firm to challenge Nvidia? Google, snatching Meta away from Nvidia as a customer. Let’s see how far they may tumble.
P.S. special thanks to Professor Surnov and his college Dimitri for their help and guidance furthering my understanding of this drug and the sector
[1] GLP-1 agonists are medications that help lower blood sugar levels and promote weight loss
[2] CDC’s figures from the National Health and Nutrition Examination Survey
[3] Behavioural Risk Factor Surveillance System
[4] State Street SPDR S&P Biotech ETF
[5] pessimistic investors
