Core Findings - The study confirms that the GLP-1/GIP dual receptor agonist Tirzepatide effectively reduces muscle fat deposition in type 2 diabetes patients while maintaining reasonable muscle mass changes [4][5] - After 52 weeks of treatment, patients showed significant weight loss and improved muscle fat infiltration, with muscle mass changes scientifically aligned with weight loss [4][5] - The research utilized data from the UK Biobank, involving nearly 3,000 real-world cases, providing a precise reference for clinical outcomes [4][5] Research Background - This milestone study originated from the MRI subgroup analysis of the SURPASS-3 clinical trial and was published in The Lancet Diabetes & Endocrinology in June 2025 [5] - The research team employed high-precision MRI technology to systematically compare the effects of Tirzepatide and insulin degludec on thigh muscle volume, fat infiltration, and standardized Z-scores after 52 weeks [5][7] Clinical Significance - Weight management is a core strategy in type 2 diabetes treatment, with over 10% weight loss potentially leading to disease remission and cardiovascular benefits [7] - Traditional weight loss methods often result in muscle loss, increasing the risk of sarcopenia in elderly patients [7] - Tirzepatide, as the first GIP/GLP-1 dual receptor agonist, has demonstrated superior weight loss and fat regulation effects, with this study providing authoritative data on its impact on muscle composition [7][8] Research Methodology - The study employed an international multicenter, randomized controlled trial design, including strictly defined type 2 diabetes patients [8] - Participants were divided into four groups: Tirzepatide 5mg/10mg/15mg weekly injection groups and a daily injection control group of insulin degludec [8] Key Research Highlights - Precise imaging assessments were conducted at baseline and after 52 weeks using MRI to quantitatively measure thigh muscle fat infiltration, lean muscle volume, and standardized Z-scores [9] - The introduction of UK Biobank data established a muscle-weight change model, enhancing the generalizability of the results [9] - Key findings indicated that weight loss does not equate to muscle loss, showcasing Tirzepatide's unique advantages [9][10] Clinical Breakthrough - The study innovatively utilized MRI technology to assess the effects of Tirzepatide on muscle composition in type 2 diabetes patients [13] - It revealed that significant weight loss (average 10.1%) was achieved while effectively reducing muscle fat infiltration, with muscle mass decline within physiological adaptation limits [13][14] Multiple Clinical Benefits - Tirzepatide demonstrated a unique "fat loss, muscle preservation" advantage, significantly reducing muscle fat infiltration by 0.36 percentage points [15] - The muscle mass reduction of 0.64 liters was proportionate to weight loss, outperforming muscle loss associated with simple dieting [15] - The study provided critical decision-making references for clinicians, particularly for patients needing enhanced weight management [15] Limitations and Future Directions - The study did not assess changes in muscle strength and daily activity capabilities [15] - There was a lack of strict control over lifestyle factors such as diet and exercise [15] - Long-term efficacy and safety beyond one year require further validation [15]

Company Strategy & Market Opportunity - Lilly aims to provide freedom from diabetes, eliminate serious health issues caused by obesity, and reduce cardiovascular deaths[10] - The company estimates a significant addressable market of over 170 million patients by 2030 for obesity and related conditions[13] - Outside of the US, the addressable market is expected to be approximately 1 billion patients[15] Orforglipron Development Program - Orforglipron, a GLP-1 small molecule, has a broad development plan including studies for Type 2 Diabetes, obesity, hypertension, and obstructive sleep apnea[20] - In the ACHIEVE-1 trial, all three doses of orforglipron achieved superiority versus placebo in reducing HbA1c levels in patients with Type 2 Diabetes[27] - ACHIEVE-1 trial data showed significant reductions in HbA1c observed as early as 4 weeks, with approximately 3/4 of patients achieving an ADA HbA1c target of less than 7%, and 2/3 reaching HbA1c ≤6.5%[27] - ACHIEVE-1 trial also demonstrated dose-dependent reduction in body weight, with approximately 2/3 of patients achieving ≥5% weight reduction and approximately 1/3 achieving ≥10% weight reduction[30] - Topline results for ATTAIN-1, an orforglipron trial in obesity, are expected in Q3 2025[39] Retatrutide Development Program - Retatrutide is undergoing global development with the TRIUMPH program for obesity and related complications, and the TRANSCEND program for Type 2 Diabetes[41] - Topline results for TRIUMPH-4, a retatrutide trial in knee osteoarthritis pain and overweight or obesity, are expected in Q4 2025[48] Tirzepatide & Early Phase Pipeline - The SURPASS-CVOT trial is designed to evaluate tirzepatide against dulaglutide in patients with established cardiovascular disease[51] - Eloralintide, a selective amylin receptor agonist, showed weight loss up to 11.3% in Phase 1 trials and is well-tolerated with less than 10% incidence of GI side effects[60]

Group 1: Dividend-Paying Stocks Performance - Dividend-paying stocks in the S&P 500 index delivered an average annualized return of 9.2% over the 50-year period ending in 2024, compared to 4.3% for non-dividend stocks [3] - Novo Nordisk and Constellation Brands are highlighted as dividend-paying stocks that have seen significant price declines but are expected to rebound [4] Group 2: Novo Nordisk Analysis - Novo Nordisk's stock price has dropped over 50% in the past year, yet its earnings per share have increased by 154% over the last five years, indicating strong underlying performance [5] - Analysts project a consensus price target above $97 per share for Novo Nordisk, suggesting a potential 40% increase in the next 12 months [6] - The company has increased total dividends per share by 173% from 2019 to 2024, with a potential yield of 1.8% for investors buying at recent prices [7] - First-quarter sales of its obesity drug, Wegovy, surged by 65% to $2.9 billion, contributing to an overall revenue increase of 18% at constant exchange rates [8] - The main patent for semaglutide, Novo Nordisk's leading drug, does not expire until 2032, allowing for continued market exclusivity [10] Group 3: Constellation Brands Analysis - Constellation Brands' stock has fallen by about one-third in the past year, but analysts expect a rebound with an average price target of $202, implying a 17% gain [11] - The company has consistently raised its dividend since 2015, with a current yield of 2.4% and a 229% increase in dividend payments over the past 10 years [12][13] - Constellation's beer business is gaining market share, and despite potential challenges from new tariffs on imports from Mexico, it remains the sole distributor of popular brands like Modelo and Corona [14][15]

Core Insights - The healthcare sector is highlighted as having significant growth opportunities, particularly in the weight loss drug market and gene editing technologies [2][4]. Group 1: Weight Loss Drug Market - Eli Lilly is positioned to potentially lead the GLP-1 agonist market, currently holding approximately 35% market share, while Novo Nordisk leads with 65% [4]. - The GLP-1 market is projected to grow to a $150 billion opportunity over the next decade, representing a tenfold increase from last year's sales [4]. - Eli Lilly is developing two promising drugs: Orforglipron, an oral GLP-1 pill, and Retatrutide, which targets multiple hormones and is in phase 3 studies [5][6]. - Analysts anticipate Eli Lilly will achieve 32% annualized earnings growth over the long term, despite a high price-to-earnings (P/E) ratio of nearly 65 [7][8]. Group 2: Gene Editing Technology - CRISPR Therapeutics is advancing its commercialization efforts for Casgevy, a therapy for sickle cell disease and beta-thalassemia, which is the first CRISPR-based treatment to receive FDA approval [10]. - The company has five additional therapies in clinical trials, indicating potential for significant growth if successful [11]. - Analysts project CRISPR Therapeutics will achieve $173 million in revenue next year, with an enterprise value of $2.2 billion, suggesting a reasonable price for the stock given its potential [12].

Summary of China GLP-1 Market Update Industry Overview - **Industry**: China Pharma and Biotech, specifically focusing on the GLP-1 market - **Key Products**: Semaglutide (Ozempic, Wegovy) and Tirzepatide Core Insights 1. **Sales Performance**: - Semaglutide sales in China increased by **110% QoQ** in 1Q25 after a **49% QoQ** decline in 4Q24, indicating easing supply constraints. However, YoY growth has slowed from over **100%** to **19%** [1][6][7] - The Chinese market contributes only **2-4%** of global GLP-1 sales, significantly lagging behind the US market, which accounts for **70-80%** [6][15] 2. **Pricing Trends**: - A **5-7%** price decline for Semaglutide has resumed in 2025 after stabilization in late 2024. Hospital pricing fell by **7-8% QoQ** in 1Q25 [2][23][33] - Tirzepatide is priced **2-3 times** higher than Semaglutide, with monthly costs ranging from **CNY 3,000 to CNY 4,000** [26][38] 3. **Market Segmentation**: - The GLP-1 market in China is segregated into hospital pricing (lower, NRDL-covered) and retail pricing (higher, not covered by insurance) [22][28] - New GLP-1 drugs like Wegovy and Tirzepatide are expected to remain outside of NRDL coverage, maintaining higher retail prices [22][29] 4. **Competitive Landscape**: - The market is becoming increasingly competitive with **7 domestic players** showing weight loss efficacy over **15%** [3] - United Laboratories has entered an exclusive licensing agreement with Novo Nordisk for UBT251, a new GLP-1 drug, with potential milestone payments up to **CNY 1.8 billion** [49] 5. **Clinical Trials and Efficacy**: - Recent trials show promising results for various GLP-1 drugs, with weight loss efficacy ranging from **9.5% to 19.8%** in different studies [50][51] - Notable results include Raynovent's RAY1225 showing **15.1%** weight loss in a Phase 2 trial and BrightGene's BGM0504 reporting up to **19.8%** weight loss [50] Additional Important Insights - **Supply Constraints**: Despite recent improvements in supply, Tirzepatide continues to face shortages, affecting its availability in online pharmacies [29][25] - **Long-term Pricing Outlook**: The expectation is that domestic supply of new GLP-1 drugs will drive prices down significantly in the long term, potentially to **CNY 300/month** [2] - **Investment Ratings**: Companies like Hansoh, Innovent, and Jiangsu Hengrui are rated as Outperform, while CSPC is rated as Market-Perform [5] This summary encapsulates the key points from the conference call regarding the current state and future outlook of the GLP-1 market in China, highlighting both opportunities and challenges within the industry.

Core Insights - Eli Lilly's experimental drug Bimagrumab, when combined with Novo Nordisk's GLP-1 weight loss drug Wegovy, shows superior weight loss results while preserving muscle mass [1][2] - The combination therapy resulted in a 22.1% weight reduction over 48 weeks, with 92.8% of the weight loss coming from body fat, compared to a 15.7% reduction and 71.8% fat loss with Wegovy alone [1] - Morgan Stanley expresses optimism about the combination therapy's efficacy and safety, noting improvements in various cardiovascular metabolic indicators [2] Company Analysis - Morgan Stanley highlights that the combination therapy's safety and tolerability are better than expected, with mild muscle cramps occurring in about 60% of patients, and transient increases in ALT and lipase levels [2] - Eli Lilly is conducting a Phase II trial for Bimagrumab combined with Tirzepatide for obesity and/or type 2 diabetes, with data expected in April and October 2026 [2][3] - The stock rating for Eli Lilly is "Overweight" with a 12-month target price of $1,133, representing a 46% upside from the closing price of $778.08 on June 24 [3] Industry Insights - The combination therapy may be particularly beneficial for older patients on GLP-1 medications, who are more prone to muscle loss [3] - The concept of "sarcopenic obesity" is identified as a significant indication for the combination therapy, with interest in its application for metabolic-associated fatty liver disease (MASH) and osteoarthritis [3] - Potential upside risks for Eli Lilly's stock include better-than-expected performance of oral GLP-1 drug Orforglipron and positive results from Tirzepatide studies [4]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights recent positive developments in the high-quality weight loss sector, particularly focusing on myostatin pathway clinical trial results from Regeneron and Scholar Rock, which demonstrate significant reductions in lean body mass loss when combined with GLP-1 medications [4][12] - The pharmaceutical and biotechnology sector experienced a decline of 4.35% in the third week of June 2025, underperforming the CSI 300 index by 3.9 percentage points, ranking 29th among 31 sub-industries [5][16] - The report emphasizes the potential of Activin receptor drugs, such as Eli Lilly's Bimagrumab and Lai Kai's LAE-102, to retain lean body mass and even promote muscle gain, with promising safety and pharmacokinetic data [4][12] Summary by Sections 1. Recent Developments in Weight Loss Sector - Regeneron's myostatin antibody Trevogrumab combined with semaglutide showed a 50.8% reduction in lean body mass loss over 24 weeks, compared to a 7.9 lbs loss with semaglutide alone [4][12] - Scholar Rock's myostatin antibody Apitegromab combined with Tirzepatide demonstrated a 54.9% reduction in lean body mass loss [4][12] 2. Market Performance - The pharmaceutical and biotechnology sector's decline of 4.35% in June's third week was the largest among all sectors, with the vaccine sector experiencing the smallest drop of 0.4% [5][21] - Other sub-sectors, such as blood products and medical consumables, also faced declines, with the largest drop seen in other biological products at 6.7% [5][21] 3. Recommended Stocks - Recommended stocks include major pharmaceutical and biotechnology companies such as Heng Rui Medicine, East China Medicine, and Innovent Biologics, among others [6]

Core Insights - Scholar Rock's Phase 2 EMBRAZE trial results indicate that apitegromab combined with tirzepatide can significantly preserve lean mass during weight loss, with a notable reduction in lean mass loss compared to tirzepatide alone [1][2][3] Group 1: Trial Results - The trial showed that 30% of the weight loss from tirzepatide was attributed to lean mass loss, while the addition of apitegromab reduced this to 14.6% [3][4] - Patients receiving the apitegromab-tirzepatide combination lost 12.3% of their body weight, compared to 13.4% for those on tirzepatide with placebo [4] - The combination therapy resulted in a higher quality of weight loss, with patients losing 85% fat and 15% lean mass, compared to 70% fat and 30% lean mass in the placebo group [4] Group 2: Market Reaction - Following the positive trial results, Scholar Rock's stock price increased by 18%, reaching $36.77 [6]

Financial Data and Key Metrics Changes - Cash and cash equivalents and short-term investments totaled $59.2 million as of March 31, 2025 [17] - Research and development expenses increased to $7.2 million for the three months ended March 31, 2025, compared to $1.9 million for the same period in 2024 [18] - General and administrative expenses rose to $4.6 million for the three months ended March 31, 2025, compared to $4.2 million for the same period in 2024 [18] - The net loss for the three months ended March 31, 2025, was $11.1 million, with non-cash share-based compensation expense of $2.2 million [19] Business Line Data and Key Metrics Changes - The company completed enrollment in its Phase IIa CBEYOND trial ahead of schedule and amended the study to extend to 52 weeks [4][5] - New preclinical data validated the potential of nirmasumab as a weight loss therapy, showing significant weight loss comparable to less restricted small molecules [5][6] Market Data and Key Metrics Changes - The evolving policy environment presents regulatory uncertainties, particularly regarding drug pricing policy and FDA transitions [8][9] - The company believes its exposure to these uncertainties is limited in the near term as it prioritizes clinical development milestones [9] Company Strategy and Development Direction - The company aims to address the chronic nature of obesity with sustainable long-term solutions through its differentiated antibody approach [10] - The management is focused on disciplined execution while tracking developments in the regulatory landscape [9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the clinical progress and the potential of nirmasumab to deliver durable weight loss with fewer safety concerns [6][10] - The company is preparing for key scientific and investor events to present additional data [6] Other Important Information - The company is closely monitoring potential tariff impacts on its manufacturing activities, with no expected immediate effects [19][21] - The independent Data Safety Monitoring Committee has completed three reviews with no safety concerns reported [7][58] Q&A Session Summary Question: What can be expected at ADA and ECO? - Management deferred details about ADA and ECO presentations to the CSO, who mentioned a cohesive model comparing different CB1 inhibitors will be presented at ECO [24][30] Question: How does management view the differentiation between nirmasumab and monlunabant? - Management believes investors are beginning to grasp the differences, emphasizing the additive effects of nirmasumab in combination with tirzepatide [25][27] Question: What is the plan for regulatory interactions? - The company plans to have discussions with the FDA regarding the Phase IIa data and potential Phase IIb study after data readouts [35][39] Question: How does nirmasumab preserve lean muscle mass? - The combination of nirmasumab with tirzepatide shows significant fat mass reduction while preserving lean mass, with the greatest effect observed in combination [42][46] Question: What are the expectations for the primary endpoint at 26 weeks? - The primary endpoint is targeting an 8% weight loss at 26 weeks, with expectations for separation from placebo [61] Question: What is the incremental benefit of extending the CBION study to 52 weeks? - The extension allows for broader efficacy and safety data collection, which will inform the Phase IIb study [68][70] Question: How is the trial powered based on preclinical studies? - The preclinical data has increased confidence in the expected outcomes, with robust inhibition of CB1 and significant weight loss observed [78][80]

Financial Data and Key Metrics Changes - Scholar Rock reported an outstanding year in 2024, with significant progress towards regulatory milestones for apitegromab, including the submission of the BLA in the U.S. in January and the upcoming MAA submission in the EU in March [6][36]. - The company anticipates a transformative year in 2025, with plans for a potential launch of apitegromab in the U.S. in Q4 2025 and in the EU in 2026 [37]. Business Line Data and Key Metrics Changes - The SAPPHIRE study demonstrated that apitegromab plus standard-of-care resulted in a 1.8% improvement in the Hammersmith Functional Motor scale compared to placebo, with 30% of patients achieving a 3-point or greater improvement [9][10]. - The cardiometabolic program is on track to share top-line data from the EMBRAZE study in Q2, with the IND filing for SRK-439 planned for Q3 [8][35]. Market Data and Key Metrics Changes - Approximately two-thirds of the 10,000 individuals living with SMA in the U.S. and 35,000 globally have received SMA-targeted therapy, indicating a significant market opportunity for apitegromab as a muscle-targeted therapy [14][15]. - The current market for GLP-1 receptor agonists is projected to generate over $100 billion in sales, highlighting the potential impact of Scholar Rock's cardiometabolic programs [22]. Company Strategy and Development Direction - Scholar Rock aims to establish a neuromuscular franchise starting with SMA, with plans to expand treatment to other neuromuscular disorders [37]. - The company is focused on building a strong commercial team and infrastructure to support the launch of apitegromab, including outreach to payers and scaling the customer-facing team [19][20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of apitegromab to transform the standard of care for SMA, emphasizing the importance of addressing progressive muscle weakness [12][15]. - The company is optimistic about the EMBRAZE study and the potential for SRK-439 to enhance weight management therapies by preserving lean muscle mass [35][36]. Other Important Information - Scholar Rock has initiated a disease education campaign called "Life Takes Muscle" to raise awareness about the impacts of muscle weakness in SMA [16][17]. - The company is preparing to offer home infusion services at launch to enhance patient support [19]. Q&A Session Summary Question: Discussion on SAPPHIRE data presentation - Management highlighted the importance of presenting additional data points at the MDA conference, focusing on the consistency and impact across age groups and endpoints [42][43]. Question: Insights on obesity and lean mass preservation - Management clarified that a 20% to 40% improvement in lean mass is considered clinically meaningful, and they are looking for trends in the EMBRAZE study to inform the development of SRK-439 [41][47]. Question: Exploration of additional neuromuscular indications - Management is actively engaging experts to explore adjacent neuromuscular indications and is assessing the unmet need and technical success probability for potential studies [60][63]. Question: Implications of FDA guidance on obesity trials - Management noted that the FDA's guidance reinforces the importance of assessing lean mass loss and that they will continue to follow this closely while developing SRK-439 [69][71]. Question: Comparison of SRK-439 and apitegromab - Management expressed confidence in the profile of SRK-439, indicating it may have greater affinity for the target and could potentially offer advantages in dosing and efficacy [80][82]. Question: Initial payer discussions and pricing strategy - Payers have shown receptiveness to Scholar Rock's innovation, and management expects access to be reflective of the value apitegromab brings to SMA treatment [85][86]. Pricing details are not yet disclosed but are expected to align with other SMA treatments [89].