Pfizer's halt on its obesity drug development underscores the heightened competition it faces in a lucrative market projected to exceed $100 billion.
Boeing's delivery suspension from China highlights the ongoing trade tensions and poses significant challenges for the company amidst declining demand.
Deep dives
Pfizer's Setback in the Obesity Market
Pfizer recently terminated the development of its obesity drug, Danaglipron, after a patient in a trial showed liver injury signs. This decision raises concerns about Pfizer's position in a rapidly growing market expected to surpass $100 billion. The company has already been trailing behind competitors like Novo Nordisk and Eli Lilly in this lucrative space, which has prompted talks of potential acquisitions to stay relevant. With approximately $15 billion in lost revenue expected from other medications expiring between 2025 and 2029, Pfizer must find new avenues for growth amidst increasing competition in obesity treatments.
Challenges Facing Boeing Amid Trade Tensions
Boeing is facing significant challenges as China suspends deliveries of U.S. aircraft in response to ongoing trade tensions between the U.S. and China. The company has been experiencing diminished orders from Chinese airlines, with the last substantial order occurring in 2018. Even though currently there are over 240 aircraft on order from China, many are already built and need delivery, creating logistical and financial pressure for Boeing. Analysts believe this situation highlights the strained relationship between the U.S. and China and could force Boeing to seek new sales in emerging markets, such as India.
LVMH Reports Weaker Sales Due to Market Conditions
LVMH reported weaker than expected sales, primarily driven by declining demand for luxury goods in key markets like China and the U.S. The company's fashion and leather goods division, comprising a significant portion of its sales, saw a notable drop, influenced by decreased tourist spending and ongoing trade tensions. Analysts indicated that while the U.S. market remains relatively stable, the sharp decline in consumer interest from China is concerning for the luxury sector overall. Given the expected tariffs in the luxury industry, companies must navigate pricing strategies to balance costs while maintaining consumer interest.
Intel's Strategic Shift with Altera Stake Sale
Intel is spinning off a 51% stake in its programmable chips unit, Altera, to Silver Lake Management for $8.75 billion, roughly half of its initial investment. This decision reflects new leadership's strategy to divest non-core assets while focusing on the core business of foundry and CPU design. Analysts believe this move could provide Intel with the necessary cash to streamline operations and strengthen its market position. By partnering with Silver Lake, Intel retains an interest in Altera’s performance while refocusing on its core competencies in the semiconductor industry.
Watch Alix and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Hosts: Paul Sweeney and Alix Steel
On this podcast:
Michael Shah, Bloomberg Intelligence Senior Pharma-Biotech Analyst, discusses Pfizer terminating development of its obesity pill.
George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense, & Airlines Analyst, talks about China ordering its airlines to stop taking deliveries of Boeing jets.
David Welch, Bloomberg Detroit Bureau Chief, discusses the Bloomberg Big Take story: “GM and Its Eight-Year, $35 Billion EV Bet Brace for Tariff Hit.”
Woo Jin Ho, Bloomberg Intelligence Senior Technology Analyst, talks about news that Elliott Investment Management is said to have built a position in H-P-E worth more than $1.5 billion.
Mandeep Singh, Bloomberg Intelligence Senior Tech Industry Analyst, talks about Intel agreeing to sell a 51% stake in its programmable chips unit ‘Altera’ to Silver Lake Management.
Mark Gurman, Bloomberg News Managing Editor for Global Consumer Tech, discusses the latest news on Apple.
Bloomberg Intelligence, the research arm of Bloomberg L.P., has more than 400 professionals who provide in-depth analysis on more than 2,000 companies and 135 industries while considering strategic, equity and credit perspectives. BI also provides interactive data from over 500 independent contributors. It is available exclusively for Bloomberg Terminal subscribers.
