Eli Lilly and Co

Leerink Partners' David Risinger maintains a Hold rating on AbbVie (ABBV) stock, citing positive Phase 3 tavapadon trial results but cautious about sales projections, remaining trials, and market competition.

The FDA approved Bristol Myers Squibb's Cobenfy, the first novel schizophrenia medication in decades, offering better tolerability and a new treatment approach by blocking muscarinic cholinergic receptors. Developed by Karuna Therapeutics, Cobenfy targets M1 and M4 receptors in the brain, avoiding peripheral side effects. Approved based on Phase 3 trials showing significant symptom reduction, it has gastrointestinal side effects but lacks a black box warning. Expected to be available in October, it may be prescribed for patients unresponsive to other antipsychotics.

GLP-1 drugs like Ozempic and Mounjaro are gaining attention as blockbuster drugs face patent cliffs. These drugs, initially for diabetes, now show significant weight loss, positioning them as next-gen treatments. Competition is fierce, with Novo Nordisk and Eli Lilly leading, but other companies like Amgen, Roche, Pfizer, and AstraZeneca are entering the market. Expanding the conditions these drugs treat could influence insurance coverage. The snack industry may need to innovate as GLP-1 drugs reduce processed food consumption. The patent cliff threatens big pharma, but Medicare negotiations and biologic drugs offer strategies. Innovations like pill-form obesity drugs and mRNA cancer treatments are on the horizon. Oncology and immunology remain dominant, but obesity is emerging as a significant driver. Stock picks include Roche, mRNA companies, and Pfizer.

FDA approved Cobenfy, a new schizophrenia treatment targeting the cholinergic system, after 30 years without new options. Developed by Karuna Therapeutics and acquired by Bristol Myers Squibb, Cobenfy aims to reduce symptoms like hallucinations and delusions with fewer side effects compared to dopamine-based treatments.

FDA grants traditional approval to Retevmo (selpercatinib) for advanced or metastatic medullary thyroid cancer with a RET mutation, effective September 27, 2024.

KarXT, a new antipsychotic targeting muscarinic receptors, received US approval, offering potential for more effective and better-tolerated schizophrenia treatment. It modulates dopamine release and improves cognitive function without severe side effects, marking a shift in psychosis treatment. Future drugs may further refine this approach, tailoring treatment to individual needs.

Perspectum's MRI studies show noninvasive scans accurately identify metabolic liver disease, potentially replacing liver biopsy in clinical trials and patient care.

The BMJ report questions Kisunla's safety, citing deaths and financial ties of panel members. FDA initially denied approval due to missing data and safety concerns, later approving it. Lilly acknowledged deaths, hired an outside company for data, but refused to disclose details. Panel members had financial ties to drug companies, raising concerns about bias. Lilly's claims of drug effectiveness were criticized for being misleading.

FDA approves BIMZELX for PsA, nr-axSpA, and AS; ACR launches self-management toolkit for rheumatic diseases; research links abdominal fat to chronic pain; osteoporosis rates decline in RA patients; FDA approves EBGLYSS for moderate-to-severe eczema; coffee consumption may lower heart disease and diabetes risk.

The drug and biotech sector has outperformed the broader market, driven by new drug launches, pipeline successes, and increased M&A activity. Eli Lilly's obesity drugs have been particularly successful. Despite headwinds like pipeline setbacks and economic uncertainty, the sector has seen a surge in investments. Five large drugmakers—Pfizer, Eli Lilly, AstraZeneca, Bayer, and Sanofi—are recommended for portfolio growth, with strong financials and robust pipelines.