Vertex still knows how to do what it does best

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Hello, everyone. Damian here with a close read of the latest blockbuster deal, a look at Novartis’ multibillion-dollar gamble, and a reminder of what Vertex Pharmaceuticals does well.

The need-to-know this morning

• Eli Lilly reported fourth-quarter earnings and revenue that topped Street consensus. Sales of Mounjaro, Lilly’s GLP-1 medicine for diabetes, totaled $2.2 billion versus $1.7 billion consensus. The same drug, recently approved as Zepbound for obesity, had sales of $176 million. For 2024, Lilly is forecasting revenue in the range of $40.4-41.6 billion, higher than current Street consensus.
• Lilly also reported results from a Phase 2 study of tirzepatide (Mounjaro/Zepbound) in the fatty liver disease known as MASH, showing 74% MASH reversal without worsening of fibrosis compared to 13% for placebo — statistically significant for the study’s primary goal. Lilly said tirzepatide also showed a “clinically meaningful” reduction in liver fibrosis, a key secondary endpoint, but missed statistical significance.

Is selling stuff to biotech a good business?

Consider yesterday’s big deal, in which Novo Holdings paid about $17 billion for the pharma contractor Catalent and then flipped three of the company’s plants to Novo Nordisk, in which it owns a controlling stake.

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