Why GLP-1s are speculation, not value

Let me be honest and claim first and foremost that I am a NVO bagholder.

I thought the thesis was quite clear: MASSIVE market potential, solid growth, solid margins, a proven trail of customers that wanted the product, good drugs with potential to improve said drugs with new development and patents in the future.

However, what has been quite clear over the last 12-18 months is the amount of unknowns. Constant uncertainty clinical trials, new products, new datapoints etc.

At the same time massive competition has come up and dozens of companies are now betting on weight loss drugs.

I don’t think any investor can comfortably predict how this market will look in say, 10 years. Will it be a duopoly with Novo an Eli Lilly? Will there be many producers of many different products? Will there be one outstanding product that kills everything else?

In my view there are too many uncertainties. While NVO is attractive at 10x earnings and semaglutide definitely has a long future ahead, that future is unknown. The same is true for other GLP-1s. And while they may turn out to be a fantastic investments, there is probably more value in playing red at the roulette table than being long any of these companies.