Meta shares fall on AI restructuring report, while Lilly shrugs off Novo’s Ozempic price move
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks aren’t moving much Monday as Wall Street waits on retail earnings and a speech from Fed Chair Jay Powell later in the week. Monday’s session lacks clear themes, but Meta Platforms stands out as a laggard after a report from The Information said the longtime Club holding is planning the fourth restructuring of its AI team in six months. The story is raising questions in light of Meta’s significant investment in recruiting AI talent from other tech companies. Novo price cut : Shares of Club name Eli Lilly are relatively unchanged despite chief rival Novo Nordisk lowering prices for its popular GLP-1 medication. Novo Nordisk announced on Monday that it has cut the price of Ozempic, its popular GLP-1 for Type 2 diabetes, to $499 per month for cash-paying patients that use its NovoCare direct-to-patient program. Novo also announced that it has partnered with GoodRx to offer the same price for Ozempic and the weight-loss drug Wegovy at U.S. pharmacies. While the news may spark concerns that a price war is heating up in a battle for market share, we don’t see this specific Ozempic development advancing that narrative. The main reason why is that the cash-pay market for GLP-1s to treat Type 2 diabetes is not as important as it is for their obesity counterparts. It all comes down to insurance coverage, which is much higher for these medications for diabetes than weight loss. Indeed, Lilly does not offer Type 2 diabetes treatment Mounjaro on its LillyDirect platform, while sister drug Zepbound for obesity is on there. Lilly executives were asked about this on the company’s August earnings call, and the president of Lilly USA, Ilya Yuffa, had this to say: “With Mounjaro, we have significant coverage. So, over 90% coverage in both commercial as well as [Medicare] Part D. And so, we’re not sure if [adding Mounjaro to LillyDirect] necessarily provides additional avenue. With Zepbound, we see significant growth because we do have coverage gaps in commercial. And obviously, we also have coverage gaps without having the ability to cover anti-obesity medications in Part D. So, we see this as an opportunity for us to meet that need. For what it’s worth, we still like where Lilly sits in the obesity side of the GLP-1 market. Back in February, Eli Lilly announced that self-pay patients could get Zepbound single dose vials for $499 per month through its LillyDirect platform. That’s on par with the price for Wegovy on NovoCare. Since head-to-head studies have found Lilly’s Zepbound to be superior to Novo Nordisk’s Wegovy on weight loss, patients should continue to prefer Lilly’s GLP-1s. We initially downgraded our rating on Eli Lilly after its earnings a few weeks ago, partly due to concerns about a potential price war. However, we reversed course and upgraded the stock back to a buy-equivalent 1 following signs of confidence driven by significant insider buying activity. Nuclear win : Alphabet’s Google and the nuclear energy company Kairos Power announced on Monday the deployment of an advanced nuclear plant to the grid. Per the agreement, a reactor operated by Kairos Power will deliver up to 50 megawatts of reliable, 24/7 energy to the Tennessee Valley Authority electric grid that powers Google data centers in Tennessee and Alabama. The electricity will come from Kairos’ Hermes 2 plant, which is scheduled to begin operations in 2030. The collaboration underscores how hyperscalers are creating new partnerships with nuclear energy providers to secure, around-the-clock power supply toward the end of the decade. Unlike gas-fired electricity, nuclear power offers tech giants like Alphabet a way to run their data centers on clean energy while advancing their decarbonization goals. While Club name GE Vernova is probably best known for its heavy-duty gas turbines , the power generation company also makes small modular reactors that have gained in popularity, so nuclear developments are important to follow closely. Up next: Palo Alto Networks reports after the closing bell , the first of three Club stocks with earnings this week. Before the opening bell on Tuesday, we’ll see earnings from Club name Home Depot , Medtronic , and Viking Holdings . On the data side, we’ll see July housing starts and building permits, but we’ll take are cue on the housing sector from what Home Depot management says on the earnings call. 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