Jim Cramer talks LLY after Trump picks RFK Jr. to run HHS | Wilnesh News
As Wall Street grapples with the possibility of a major shakeup in health policy in Washington, enthusiasm for the club’s holdings of Eli Lilly needs to cool — at least for now. Republican President-elect Donald Trump on Thursday nominated Robert F. Kennedy Jr., a prominent vaccine skeptic and obesity drug critic, to lead the Department of Health and Human Services. Simply put, the U.S. Department of Health and Human Services (HHS) is a massive agency that sits atop departments such as the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Centers for Medicare and Medicaid Services. The Cabinet-level position of HHS secretary requires confirmation by the Senate, where Republicans will have a 53-seat majority while the Democratic caucus will have 47 seats. Nominated. But it’s unclear whether Kennedy can reach the 50-vote confirmation threshold. Shares of obesity drugmaker Eli Lilly fell more than 4% on Friday, extending a loss of about 3% in Thursday’s session. Media reports about Kennedy’s nomination surfaced late Thursday afternoon, and Trump confirmed the decision in a social media post after the closing bell. Shares of Danish company Novo Nordisk, Eli Lilly’s main rival in the obesity market, also fell more than 4% on Friday. Shares of Covid-19 vaccine makers including Moderna and Pfizer sold off again late Thursday night and again during the session on Friday. A popular exchange-traded fund tracking biotech stocks is facing its worst week since March 2023. Looking at the Big Picture During the campaign, Trump promised to make Kennedy go “crazy” on health care if he had the chance to return to the White House, but Wall Street widely viewed his selection to run the Department of Health and Human Services as a long shot. result. Now, the pharmaceutical industry is shrouded in uncertainty until the Senate further clarifies his support. Kennedy, 70, the son of the late U.S. senator and presidential candidate Robert Kennedy and nephew of the late President John F. Kennedy, began his career as an environmental lawyer. He has gained attention in recent decades for his controversial views on health issues, particularly vaccines. Kennedy made unfounded claims that childhood vaccines are linked to autism, despite numerous studies refuting the claims. “Vaccines do not cause autism,” the CDC website reads. Kennedy has recently taken aim at what he calls a chronic disease crisis in the United States, particularly diabetes and obesity in children. It was a focus of his failed 2024 presidential bid, initially in the Democratic primary and later as an independent candidate. Kennedy endorsed Trump in August. LLY YTD mountain Eli Lilly and Company’s stock performance so far this year. Kennedy has been critical of the pharmaceutical industry on a number of topics. Kennedy wrote in a September Wall Street Journal op-ed that the United States should consider preventing companies from advertising directly to the public, arguing that lawmakers in Washington “should cap drug prices so that companies can’t charge Americans more than they charge in Europe.” People pay much higher fees. Kennedy specifically mentioned Novo Nordisk’s diabetes treatment Ozempic when elaborating on drug price caps. Ozempic is a representative of the fast-growing GLP-1 category, in which Novo Nordisk and Eli Lilly are currently the two leading manufacturers. . Some on Wall Street expect the market for GLP-1 drugs to be worth $100 billion by 2030. Eli Lilly and Co.’s GLP-1, called tirzepatide, is sold as Mounjaro for diabetes and Zepbound for obesity. The heart of the investment thesis. Jim Cramer says it could become the best-selling drug of all time, thanks in large part to its adoption in weight loss, which Kennedy believes will combat high obesity rates in the United States. The answer is through changes in diet and the food system. Kennedy argued on social media that diet pills do not address the “root causes” of the obesity problem but only “make the wallets of distant Big Pharma executives happy.” Company CEO David Ricks and other GLP-1 supporters argue that obesity is a disease and should be treated as such by doctors and health insurance companies. In this way, they argue, GLP-1 should be considered in conjunction with diet and exercise. Together, a valuable tool for treating obesity. Eli Lilly and Novo Nordisk are also trying to show that GLP-1 improves patient health outcomes in ways beyond weight loss, the FDA said earlier this year. The drug Wegovy is also used to reduce the risk of serious heart problems, such as heart attacks and strokes, in overweight patients with cardiovascular disease. Eli Lilly has shown similar heart health benefits for tilsiparatide, which is also used to treat sleep apnea. Eli Lilly has been our favorite drug stock for years, thanks to its stellar GLP-1-led pipeline. Share price performance since we bought the stock in October 2021. Even with the recent decline, it’s more than tripled — and it goes without saying that the S&P 500 is up just over 30% over the same period. However, at this point, Kennedy’s nomination requires us to be more cautious about Eli Lilly in the short term. The stock is likely to remain weak as the market digests the implications and possibilities of a Kennedy leadership at the Department of Health and Human Services, Jim said. From a pharmaceutical stock investor’s perspective, it’s hard to imagine anything more troubling than Kennedy. Department of Health and Human Services secretary pick. “We have not approached Eli Lilly. There is no need,” Jim said at a morning meeting Friday. He noted that we took profits in early September at nearly $961 per share, which allowed us to remain patient and cautious as the Kennedy nomination process unfolded. Eli Lilly’s latest quarterly results underperformed in some areas, but underlying prescription growth for its key GLP-1 drug was encouraging. (Jim Cramer’s Charitable Trust is long LLY. See here for the full list of stocks.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll get to know Jim Cramer’s (Jim Cramer) Receive trade alerts before making a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. 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Eli Lilly and Company, a pharmaceutical company headquartered in Alcobendas, Madrid, Spain.
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Passion for club holdings Eli Lilly and Company That needs to be tempered — at least for now — as Wall Street grapples with the possibility of a major shakeup of health policy in Washington.
