Big Pharma is making big moves

A cholesterol pill and magic mushrooms may not seem to have much in common, but they both could be Big Pharma’s next cash cow.

Today, the FDA greenlit Lipfendra, a groundbreaking new pill from Merck that treats high cholesterol even better than statins, the current gold standard treatment. The drug works by targeting and removing a protein called PCSK9, which stops the body from clearing LDL, or “bad” cholesterol.

The drug already exists as an injection, such as Amgen’s Repatha, which generates $3 billion in sales a year. But cost has been a barrier to its wider adoption, and Merck’s proposed price tag for Lipfendra is far lower than the injectable versions. Plus, a pill form will be more palatable for patients, which could help propel sales of the new drug to $5 billion a year, according to the Wall Street Journal.

Shares of Merck rose 3.29% today on the news.

Far out, man

In a very different corner of medication development, Eli Lilly is betting big on psychedelic drugs.

Today, the pharma giant acquired AtaiBeckley for $2.8 billion, which will give it access to the company’s range of mental health treatments utilizing hallucinogens such as DMT and MDMA. Using psychedelics to treat conditions including depression and PTSD has risen in popularity over recent years, and the FDA under the Trump administration has fast-tracked development of some of these treatments.

Shares of Eli Lilly jumped 1.19%.

The patent cliff is coming

Weight loss drugs have determined Big Pharma’s winners and losers over the past few years, but a far more existential threat is looming over the industry.

Over the next few years, a slew of patents for blockbuster drugs will expire. Brand name drugs worth over $174 billion in annual sales will lose exclusive patents by 2032, with some estimates of lost sales as high as $350 billion. For the pharma companies that weren’t early movers in the GLP-1 gold rush—think Merck, Pfizer, and AbbVie—the looming patent cliff is a huge threat to their business.

Now these companies are in a race to roll out new medications before they go tumbling over the patent cliff, even if it means betting on esoteric treatments like psychedelics. But investors aren’t the only ones who get to enjoy the show: Today, Kalshi announced it’s expanding biotech wagers to include the outcomes of clinical trials.

A good way to hedge your pharma investments, or a symptom of the dystopic gamification of financial markets? You be the judge.—LB