It’s official, the market has a fever and the only prescription is for Healthcare stocks to cure its dreadful display of pathetic price action. 

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You see, as Apple and Nvidia lead the charge of big tech’s $500 billion slump, stocks like United Health Care Group are injecting some excitement while carrying the Dow to new heights. 

(Source: Barrons) 

At the time of this writing, $UNH has stolen the show as it’s not only pacing a nice 12.09% gain over the past five days (up 18.19% MTD)...

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But its recent earnings showcased an impressive second quarter beat as EPS crushed estimates by 2.49%, while revenue squeaked past Wall Street’s “whisper number” by .04%. However, even though some experts are saying that $UNH is the new Nvidia of the Dow, a recent breakthrough has emerged that could be an even larger catalyst for the sector this week. 

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In short, although it’s nice being a company that has positioned itself as a major cornerstone in America's health insurance, what’s even better is being a company that makes people want to take their clothes off. And that’s exactly what Roche Holdings ($RHHBY) has done. 

According to reports, Roche’s latest obesity innovation, CT-996 (which sounds like a Limitless drug), has shown extremely promising results in its early trials. 

(Source: Reuters) 

Based on their previous drug trial results, participants who tested with CT-996 ended up experiencing a whopping 7.3% of weight loss in just four weeks. (Dang, I definitely need this for my next high school reunion). 

What’s more, is that these results aren’t based on a small, obscure trial either. Roche’s data comes from a robust Phase 1 study, where participants lost 6.1% more weight than those on a placebo. Meaning Roche’s new “slimitless” pill (see what I did there?) has officially shown some dominance over its competitors including Eli Lilly’s “Zebpound” and Novo Nordisk’s “Wegovy”. 

(Source: CNBC) 

As most would suspect, this groundbreaking revelation caused quite the pump in Roche’s stock as shares soared 7% on the news, eventually settling down to 5%, resulting in a MTD gain of 12.38%.

(Source: Bloomberg) 

But even though the market clearly responded positively to Roche’s announcement,  the thing that really sets this new weight loss alternative apart is its oral administration. Unlike the blockbuster injectable GLP-1 drugs like Ozempic and Wegovy, CT-996 offers the simplicity of a once-daily pill. Which is like, super convenient and attractive for those busy individuals who want to drop a few extra “lbs” before their next summer vacation. (aka me). 

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Plus, with the weight loss market projected to balloon to $150 billion by the early 2030’s (akin to the GDP of a small nation), Roche is stepping in to potentially carve out a massive piece of the pie. 

Now, before everyone starts dreaming of a new wardrobe with this breakthrough, safety is absolutely paramount here. 

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Which is why luckily for all the heavy side peeps (and investors), Roche’s trials showed that CT-996 is well-tolerated, with side effects being mostly mild or moderate gastrointestinal issues. In fact, Roche’s Chief Medical Officer, Levi Garraway, emphasized that the drug could eventually aid in chronic weight management and glycemic control—a potential double-edged sword in the fight against obesity and diabetes. Look at that? A double win-win. 

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Yet, as Roche’s foray into the obesity and diabetes markets is no doubt causing massive waves, It’s important to note that Roche didn’t just stumble upon this opportunity. Their $3 billion acquisition of Carmot back in 2023, literally handed them a treasure trove of drug candidates, including the “holy” CT-996. Think Tampa Bay’s Super Bowl and Tom Brady (we all know they made it AND won because of the G.O.A.T.). 

But as the initial enthusiasm of Roche’s new shiny drug continues to be the talk of the town, what’s next for Roche when it comes to mass marketing this “get-slim-quick” solution? 

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Well, according to reports, Roche is now cleared to enter Phase 2 trials with a larger group of participants, while a pivotal Phase 3 trial (focusing on individuals with both type 2 diabetes and obesity) is planned to commence by the end of 2024. 

(Source: Yahoo Finance) 

So while Roche isn’t technically cleared to start making all of us celebrity “hot”... yet - the success of these trials is crucial for Roche if they want to launch a blockbuster drug soon.  

And if the good ole nature of supply and demand tells us anything it’s this: There’s a ton of people wanting a fast and convenient way of losing weight (it’s why Ozempic took off), so the demand is already there. Especially since America literally leads the world in obesity (thanks Ray Kroc)...

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But once you give them a more powerful solution like CT-996? The sky's the limit, and with this kind of momentum, it’s clear Roche isn’t stopping anytime soon. 

Stocks.News holds positions in Apple as mentioned in the article.