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Weight Loss Back In The News
GLP-1 is the hottest NEW weight loss treatment and was brought to market by Eli Lilly and Company (NYSE:LLY) in January of this year, propelling its stock to rise 35% this year.
LLY’s GLP-1 compound, Zepbound is documented as having little side effects, results in a reduction of body weight by up to 25% and will be the first of many GLP drugs LLY plans to introduce. In a Wall Street Journal podcast, The Journal, LLY CEO said it will take years for it to be able to fulfill the demand for drugs like Zepbound
LLY’s success is also leading non-pharmaceutical companies to follow suit with their own versions of GLP-1 products, by using natural mechanisms to allow the body to release GLP-1.
What is GLP-1?
Glucagon-like peptide-1 (GLP-1) is a hormone that regulates blood sugar, digestion, and appetite. It’s released by cells in the small intestine after eating, and it helps the body in several ways:
Insulin release: GLP-1 prompts the pancreas to release insulin, which lowers blood sugar levels. Insulin is a key hormone that allows the body to use food for energy.
Glucagon secretion: GLP-1 also blocks the release of glucagon, a hormone that raises blood sugar levels.
As far as weight loss goes, here are some traits of the drug that stand out:
Slows digestion: GLP-1 agonists slow down how food moves through the stomach and small intestine, which can help you feel full for longer and eat less. This is known as delayed gastric emptying
Signals the brain: GLP-1 agonists can signal the brain that your stomach has food, which can help reduce your appetite and cravings.
Our Target Company
The company we are talking about has over $100 million in trailing 12 month revenues, is profitable and has a good reputation in its industry. Still, it trades at a low P/E of 10x and is struggling to grow.
However, the CEO is insinuating that its upcoming new weight loss GLP-1 product launch “will be a “game changer.”
This information was hidden inside a video of an event the company hosted [which we clipped for you and will make available]. The CEO also mentioned that more information will be disclosed as it prepares for the product launch in October.
We presume the stock will trend sharply higher, once investors start catching on. This is what we call information arbitrage:
“…information arbitrage (InfoArb) is a strategy where an arbitrage opportunity arises from a noticeable disconnect between stock prices and the publicly available information on a company that is monetarily worth pursuing. This approach leverages the idea that the market has not yet fully recognized or acted upon certain pieces of public information, leading to potential mispricing of stocks, particularly in the microcap space.”
By the way, one of the Board Members of this company has already commandeered an incredible multibagger move in another company he is involved with.
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