very encouraged<\/a>\u00a0by interim results from the experimental drug MariTide in May, without giving details. Nonetheless, investors piled $17.7 billion onto the company\u2019s market capitalization.\u00a0<\/p>\n\u201cI\u2019ve been kind of blown away at some of the stock reactions,\u201d said Jared Holz at Mizuho Securities in New York. \u201cI think we\u2019re in store for more of it.\u201d<\/p>\n
A typical investor calculation might work like this, according to Mizuho\u2019s Holz: If the potential market is worth at least $100 billion, a drug that could capture just 5% of that market would have annual sales of $5 billion. Based on a simple sales multiple, the company or asset that could generate those sales would be worth somewhere between $15 billion and $25 billion, he said.\u00a0<\/p>\n
Investors also see a high likelihood that Big Pharma players looking to get into the space will buy up biotechs, further elevating the smaller companies\u2019 prices.\u00a0<\/p>\n
Another reason for investor confidence is that weight loss is a very clear result for a study, even a small one, said Manu Chakravarthy, Roche\u2019s global head of cardiovascular, renal and metabolism product development. \u201cIf you see it, you see it,\u201d he said. \u201cIf you don\u2019t, you don\u2019t. It\u2019s not one of those things where you\u2019re trying to guess, does this drug work or not.\u201d\u00a0<\/p>\n
An early-stage trial may not show the full picture of a new obesity asset, but it will show some important factors such as whether a drug is oral or injectable, how often it\u2019s dosed and an indication of how well it might work, said Tommy Sternberg, an equity research analyst at William Blair Investment Management. \u201cYou start to get clues,\u201d he said.\u00a0<\/p>\n
Context is important too, Powell said. For a company like Roche, which had traded at a low earnings multiple after a series of high-profile failures in Alzheimer\u2019s disease and cancer, an early-stage success in obesity could pressure investors to reconsider their position on a stock, he said.\u00a0<\/p>\n
\u201cIt does drive a change in outlook,\u201d he said. \u201cThey have to question why they don\u2019t own it.\u201d<\/p>\n
Big moves on small obesity trials will probably continue until competition becomes stiff enough that investors perceive less chance for new players to take share in the market, according to Powell, Holz and others. But for now, many still see plenty of room to grow.\u00a0<\/p>\n
\u201cIt\u2019s the first time we have good products showing strong efficacy\u201d for obesity, said Gregoire Biollaz, senior investment manager at Pictet Asset Management. \u201cIt\u2019s difficult to speak about a bubble with the data we\u2019ve seen so far.\u201d\u00a0<\/p>\n<\/div>\n
[ad_2]
\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"[ad_1] The 25 people in Roche Holding AG\u2019s obesity pill study would barely be enough to field both sides of a soccer match. Yet their<\/p>\n","protected":false},"author":1,"featured_media":246732,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[149],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/246731"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=246731"}],"version-history":[{"count":0,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/246731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/246732"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=246731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=246731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=246731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/07\/GettyImages-1968672023-e1721740244191.jpg?w=2048\")
<\/p>\n