Finimize - ⭕️ A tech play with a nice ring to it

What’s going on here?

Novo Nordisk shares suffered their sharpest drop ever after the pharmaceutical giant’s experimental obesity drug failed to live up to expectations.

What does this mean?

Weight-loss drugs have been the talk of the doctor’s office lately, with blockbuster treatments helping people shed serious pounds. Novo’s drugs – Wegovy and Ozempic – have been so successful that they’ve turned the Danish pharma firm into Europe’s most valuable company. But this lucrative market has been attracting competition by the droves, so the firm’s been racing to stay ahead of US drugmaker Eli Lilly and other rivals. That was the idea behind Novo’s latest test drug: the “next-gen” product, CagriSema, combines the active ingredient in Wegovy and Ozempic with a hormone that makes people feel fuller for longer.

Early results showed the drug did help patients lose weight – an average of 20.4% over 68 weeks for all participants who started it, and 22.7% for those who stuck with it for the entire course. Not a bad outcome, but not as good as the 25% to 27% that investors were hoping for. It also raised questions about patients’ willingness to stick with the treatment: only 57% were on the highest dose by the end of the trial. Combined, those things had Novo’s stock price losing a lot of weight on Friday, at one point dropping as much as 29%.

Why should I care?

For markets: The skinny for investors.

With the obesity drug market well and truly in vogue and pharma stock valuations looking lofty, you might want to find fresh ways to play this theme. That could mean investing in drugmakers’ suppliers and distributors, consumer healthcare companies that sell products to treat the side effects of weight-loss medications, and firms that promote healthy eating and active lifestyles. It could also mean rethinking your investments in businesses that stand to lose as fewer people battle obesity – for example, makers of sleep apnea devices, knee and hip implants for osteoarthritis patients, and equipment for bariatric surgery.

What’s going on here?

Oura – the Finnish smart ring brand adored by celebs and execs – just raised $200 million, bringing its valuation to $5.2 billion: double what it was in 2022.

What does this mean?

Finally, a big deal that isn’t about AI… mostly. This isn’t Databricks-big, but it is one of the chunkiest deals Europe has seen all year for a company whose bread and butter isn’t AI. And it’s easy to see the appeal: Oura’s sleek, stylish rings track your sleep and heart rate, and they’re sported on some very famous fingers – like those belonging to Jennifer Aniston, Prince Harry, and Jack Dorsey. No wonder the firm has seen its sales surge to $500 million this year. This new influx of cash will help the brand finance its global expansion, a potential leap into medical applications, and – yes, fine – investment in a dash of AI wizardry to keep things interesting.

Why should I care?

For markets: The power of subscriptions.

Oura’s cashing in on the booming smart ring market, which is up 90% this year alone – even as smartwatch sales slip. But it’s the firm’s $5.99-a-month subscription model that’s the real golden ticket. It turns what would otherwise be a one-time sale into a steady, predictable revenue stream – giving Oura software-like margins, financial stability, and a little extra twinkle in investors’ eyes.

The bigger picture: Mind over matter.

Wearables like Oura track your body’s every move, but the next frontier will flip the script: your thoughts will actually control the tech. Or, that’s the plan. And brain-computer interfaces from companies like Neuralink and Precision Neuroscience are edging closer to making it a reality – likely a profitable one too.