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- # 730 - 🩺 Telehealth’s life support
# 730 - 🩺 Telehealth’s life support
Good morning. An ancient treasure chest has been unlocked — at least in crypto. Mt. Gox, once the world’s largest Bitcoin exchange, is finally repaying $9B to creditors following its infamous 2014 collapse. The payout includes 140K Bitcoin, recovered from the 950K hacked in the decade prior. Since Mt. Gox’s collapse, when Bitcoin traded at just $600, the cryptocurrency has skyrocketed to ~$60K — an impressive 10,000% return.
Turns out, investors getting their money locked in bankruptcy was one of the best things that could’ve happened to them. Can’t say the same for FTX users, who missed out on a 270% $BTC rally and are only getting interest on top of their original balances.
PHARMACEUTICALS
Weight Loss Drugs Are Supposed to be the Pharma Industry’s New Kingmaker, but Americans Are Leaving Scripts Unfilled
Wall Street is high on AI, semiconductors, and weight loss… Can you find the odd one out? Over the last year, weight loss drugs like Zepbound and Wegovy have become cash cows for pharmaceutical giants Eli Lilly ($LLY) and Novo Nordisk ($NVO). These drugs are also showing promise in treating other conditions like sleep disorders and substance addiction. However, despite their promises, a new development is hindering further gains.
Read the label: Researchers say that weight loss drugs like Ozempic and Wegovy must be taken for life to be effective, but many Americans are already scaling back on their use of these drugs. A new study by Blue Health Intelligence of 170K patients found that many Americans quit GLP-1 drugs before achieving meaningful weight loss. Misinformation, insurance coverage issues, and side effects are to blame for this poor retention.
In another survey by Verywell Health, 67% of respondents said they plan to stop taking obesity medications in the next year — with most patients citing safety concerns.
The Food and Drug Administration (FDA) reports that while “adverse events” have been limited, side effects like nausea and vomiting are common — and a new study even warns that these drugs could cause blindness.
Too much of a good thing (can sometimes be bad)
Pharmaceutical titans are scaling production to meet the lifetime demand for these miracle drugs. However, a myriad of setbacks are pushing Americans toward more dangerous alternatives — forcing investors to recalibrate their expectations.
GLP-1 drugs regularly cost between $900 to $1.3K every four weeks, and many insurers are unwilling to cover them, deeming them not medically necessary.
As a result, telehealth pharmacies like Hims and Hers ($HIMS) and Roman have started selling off-brand versions of these drugs — sometimes at a tenth of the cost of the branded drugs.
Buyer beware: Compounded versions of these drugs sold by third parties have been shown to have quality issues — and could boast more severe side effects. The FDA has even warned against their use, suggesting patients “not use a compounded drug if an approved drug is available to treat a patient.” Despite this, the approved drug may be out of reach for many due to its high cost. This means patients might have to wait until the drugs go generic (or hope that a Senate investigation and a White House callout result in lower prices).
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LARGECAP RECAP
💊 Companies Are Making Billions On A Crusade Against Addiction
Pharmaceutical giants made billions of dollars from the opioid epidemic — and now, the healthcare industry is making billions solving it. With tens of thousands of Americans dying every year, some firms are turning hefty profits treating drug addictions. One of those companies is UK-listed Indivior, which has seen its stock soar nearly 400% in the past five years and is now transferring its listing to the US, where it derives 85% of its revenue from opioid, heroin, and marijuana addictions.
In 2022, the US had the highest number of drug overdoses per 1M population — but overdoses fell last year for the first time since 2018 — a milestone in the fight against opioids, which accounted for 75% of overdose deaths.
The company anticipates further growth due to the legalization of cannabis in the US, where the CDC estimates cannabis use disorder affects approximately 3 out of 10 people.
Life saver: Despite progress in offering treatment to people living with substance use disorder, drugs like Emergent BioSolutions’ ($EBS) Narcan have become a front-line force in saving lives. Narcan is also bringing down the number of overdose deaths, prompting pharmacy giant Walgreens ($WBA) to launch its own generic, over-the-counter version of the drug — and the state of California is distributing its own generic version to lower prices and increase access.
🏥 Telehealth Teeters On Brink As Funding Fever Fades
Telehealth is plagued by dwindling capital, poor customer experiences, and declining usage — and there’s no cure in sight. Following a $29B surge in COVID-related funding, a crop of once-unicorn startups have gone bankrupt. As venture capital support drops off, the industry struggles to establish self-sustaining business models.
Adult use of telemedicine fell from 37% in 2021 to 30% in 2022, coinciding with a decrease in industry-wide funding to $10.7B last year.
Amidst these setbacks, Walmart ($WMT) pulled the plug on its telehealth platform, and Amazon ($AMZN) consolidated its program to streamline operations.
Medicine meltdown: At the heart of telehealth issues lies expensive products with subpar service. Mail-order drugs can cost up to 35x more than those from pharmacies — assuming they arrive at all. Customers of CarelonRx, a digital pharmacy launched by Elevance Health ($ELV), have faced month-long delivery delays only to receive incorrect prescriptions — or none at all. This debacle led to the resignation of CarelonRX’s CEO this spring, with industry experts acknowledging a sector-wide need for “retrenching.” As zombie-like companies roam the telehealth scene, it’s clear the industry needs a resurrection.
JOE’S MARKET PULSE
![](https://media.beehiiv.com/cdn-cgi/image/fit=scale-down,format=auto,onerror=redirect,quality=80/uploads/asset/file/65410904-d88e-4eb3-ae40-2ea1713ef047/Moving_Stocks_Banner.png?t=1720236850)
Before this Wall St. legend buys a stock, here’s what he does: Bullish or Bearish? One Wall Street legend’s $5,000 system may finally have simplified this crucial question. And now, he’s giving you access to his system’s rating on 3 popular stocks so you can try it yourself 100% free of charge. Click here to access.*
Markets & Economy
24-hour stock trading takes steam: Interactive Brokers and Robinhood offer 24-hour trading during business days, delighting retail investors. Wall Street isn’t thrilled, citing reduced overnight liquidity causing larger price swings. [Read]
Positive US jobs report surprises: Payrolls increased by 206K non-farm jobs in June, slightly more than the 200K predicted by Dow Jones. This positive surprise comes after a revision down from 218K in May. Meanwhile, unemployment was higher than expected at 4.1%. [Read]
The UK votes out Rishi Sunak in landslide election: After 14 years of Conservative rule, the Labour Party takes charge with 412 seats, eclipsing the 121 seats held by the Conservatives. [Read]
Business & Wealth
New ETF bets on “deglobalization”: The American Reshoring ETF ($RSHO) focuses on domestic industrials, betting on production returning to the US. Launched in May 2023, $RSHO has seen a 37% return since inception. [Read]
Noncompete ban is partially blocked: A federal judge partially blocked the FTC’s ban on noncompetes, intended to increase employment flexibility and potentially raise annual wages by $300B. The judge argued that the FTC was overstepping its authority. [Read]
Americans take to the skies: A booming US dollar gives tourists more purchasing power abroad. Popular destinations include Japan (USD up 15%) and Europe (up 2.3%), with Argentina and Vietnam offering top value. The strong dollar is due to higher interest rates and economic strength. [Read]
*Thanks to our sponsors for keeping the newsletter free.
CHART
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DIGIT OF THE DAY
2024 To Mark First Decline For New Vehicle Prices in 16 Years, Yet Buyers Aren’t As Relieved
If you like to drive a hard bargain, 2024 might be the year to hit the dealership. Rising car prices have kept potential buyers away for years. However, this year marks the first time since 2008 that new vehicle prices are expected to drop — thanks to restocked dealerships and stabilized supply chains.
As of June, the average price for new vehicles fell 3% year-over-year to ~$45K — however, monthly payments remain at a record high of $740 due to climbing interest rates.
Nationwide vehicle deliveries rose ~2% in the first half of the year, while dealership inventories increased 50% to ~2.7M vehicles by the end of May.
Driving us crazy: Lower prices are a win for customers, but many Americans still find vehicle purchases unaffordable due to high interest rates. To cope, many are opting for leases with preferred pricing or longer-term loans. Around 70% of new-vehicle loans in the second quarter of 2024 are set for over 60 months. According to Edmunds’ Jessica Caldwell, “Prices likely need to fall further to bring more buyers into the market” (WSJ).
EXTRA JOE
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