Healthcare and Pharmaceutical Sector
Healthcare marches higher on obesity drug tailwinds and new approvals, but supply crunches and regulatory setbacks temper the rally.
AbbVie won FDA approval to give Skyrizi (a psoriasis treatment) to children as young as six with moderate-to-severe plaque psoriasis or joint inflammation. Think of it like getting a bigger customer base: the company can now sell its drug to a whole new age group. A smaller 55 mg dose was also approved for lighter kids, making the medicine fit more patients.
The FDA rejected Lantheus's application for a diagnostic imaging kit that spots certain tumors because a third-party manufacturer (the company that physically makes the drug) couldn't get its act together. This is like ordering a custom cake but the bakery's kitchen fails inspection—no cake, no approval. The company now has to fix manufacturing problems before trying again.
Eli Lilly is on a tear as its blockbuster obesity treatment generates massive revenue and hype (Seeking Alpha notes the stock hit all-time highs alongside peers Johnson & Johnson and others). The drug works by making your body feel full sooner, cutting appetite like a dimmer switch on hunger. Investors are betting the company will keep printing money as more people demand weight-loss treatments.