Magic Pills - How New Weight Loss Drugs are Changing Society and the Stock Market

In the latest episode of Stocks Neat, Steve and Gareth discuss the recent news surrounding the GLP-1 inhibitor drugs taking the world - and stock markets - by storm. Originally used to treat Type-2 diabetes, clinical trials have shown GLP-1 drugs may be highly effective in causing weight loss. While the most common form of the drug requires regular injections, Steve believes that the forthcoming oral version could be a "game changer" for the future of health. 

But are GLP-1's really a magic pill for weight loss? And how do we think about the future of portfolio companies like ResMed or Viva Leisure in light of this news? Listen to the podcast to find out. 

Transcript

Just a quick reminder, this podcast may contain general advice, but it doesn't take into account your personal circumstances, needs, or objectives. The scenarios and stocks mentioned in this podcast are for illustrative purposes only and do not constitute a recommendation to buy, hold, or sell any financial products. Read the relevant PDS, assess whether that information is appropriate for you, and consider speaking to a financial advisor before making investment decisions. Past performance is no indicator of future performance.

[00:00:39] SJ: Hello and welcome to episode 21 of Stocks Neat. I'm Steve Johnson, Chief Investment Officer at Forager Funds. This is a podcast where we talk the world of stock markets and usually try a whiskey. I'm joined by my regular co-host, Gareth Brown, Portfolio Manager in International Fund. How are you, Gareth?

[00:00:59] GB: Hi, Steve. Hi, everyone. I'm well. Thanks. 

[00:01:02] SJ: I've got a long list of reasons for not having alcohol today, but what's yours? 

[00:01:06] GB: Well, I haven't mentioned it to you but I – this is my sixth consecutive August without alcohol. I started I think 2018. [inaudible 00:01:14], and it's actually my birthday month. So it seems sensible to do it the month afterwards. I usually take a few months a year when I don't drink any alcohol at all, and August has worked well for me. 

[00:01:26] SJ: Very good. It's also a Monday. I'm in the late stages of a very late marathon program, and we are frantically busy with reporting season across both portfolios, so plenty of reasons. I'm drinking a green tea and mint, very, very tasty green tea. You don't have anything in front of you, though?

[00:01:43] GB: I came pretty hydrated. 

[00:01:46] SJ: Sorry about that, team. If you've got anything you'd like us to try on the whiskey front, we can give it a bash next month, but lots of really interesting things to talk about today. Also on the health front, we are going to talk about some new drugs that are taking the world and the stock market by storm. We're going to talk about a couple of stocks that have been specifically impacted by that and then finally a bit of a wider exploration of this growing, I think, tendency for these themes to take hold of investors in a very, very significant way. 

So what am I talking about on the drug front, Gareth?

[00:02:20] GB: You are talking about, I believe, glucagon-like peptide-1 inhibitors or agonists. This is a class of drug I'll get to in a moment, but you may have heard of brand names like Ozempic or Wegovy I think it's pronounced and that they're both produced by a Danish company called Novo Nordisk. The other big one is Mounjaro, which is by Eli Lilly. Unsurprisingly, both Novo Nordisk and Eli Lilly are two of the biggest insulin manufacturers in the world. Some of these drugs and their predecessors have actually been in use for a long time, potentially a couple of decades here, as an alternative treatment for type 2 diabetes. 

After eating, your blood sugar rises. In a healthy individual, insulin comes along. Insulin is a hormone that your body produces which helps to lower that blood sugar and basically turn that energy into other useful things for other systems of the body for energy. It does it fairly promptly, and then it clears quickly. This is really important. Blood sugar rising after a meal, it's essential to life. But to the extent that it remains chronically elevated, it's a fairly major health risk. So it does all sorts of damage to the arterial walls and other parts of the vascular system. Then this in part at least explains some of the health complications that come with diabetes, especially untreated diabetes, so elevated heart attack risk, stroke risk, even cancer. 

[00:03:45] SJ: Now, like I said, these drugs have been around for a very long time. There's probably – every single person listening to this podcast knows someone who has diabetes. This is the form of drugs that you might have noticed people having to inject, so. 

[00:03:58] GB: Well, yes. But there's another form of diabetes treatment which is an injection-based system. So I think the front line here has been for type 2 diabetes. In particular, it has been endogenous insulin, so way back in the day when type 2 wasn't even a problem, and you really are looking for treatments for type 1. I think they were even using pig insulin that they derived from the blood of pigs. In more recent decades, they have worked out how to use synthetic insulin. So biosynthetic insulin, it's injected. Or increasingly, there's a remote release mechanism that's into your bloodstream there. 

It’s quite a cool business. I’ve looked closely at Novo Nordisk for some time. But when I did look 10 years ago, this was – all this insulin was being made in one factory in Denmark. I think it was 60% global market share or something like that made in one factory. So obviously, scale matters, and quality and consistency really, really matters in this space. In more recent decades, we've had the emergence of some of these GLP-1 inhibitor drugs as an alternative form of treatment. 

So the way they work – my understanding at least. I'm no doctor, but they encouraged the pancreas to release more insulin. So it achieves much the same impact as injecting synthetic insulin. It has the added benefit that it creates far fewer problems with blood sugar crashes or hypo events. So it is a better profile in terms of safety for the user. 

[00:05:20] SJ: But that's been a great business for a very long period of time. The same companies dominate both of those treatments, right?

[00:05:27] GB: Yes, correct. 

[00:05:28] SJ: Novo Nordisk had been a wonderful investment for a very long period of time. But what's got everyone very, very excited is that they've noticed a very interesting – you hate the word side effect, but I'll use it here because –

[00:05:39] GB: I have a point on that. 

[00:05:40] SJ: Alternate effect of the drugs. 

[00:05:42] GB: There's nothing “side” about it. Sometimes the effects there are not the wanted effects. Sometimes, they're very essential. In this case, that's true. One of the side effects was dramatic weight loss. So obviously, research has really paid attention to that. To this day, it is not known precisely why these things create dramatic weight loss. It seems to be an above-and-beyond management of the insulin system. It has been noted that food moves slower from the stomach into the small intestine, and helps promote a feeling of fullness on a smaller amount of food. But why and exactly how, it's not really known. 

But there's been numerous attempts over the past 20 years to take what they're doing on the diabetes side and provide it to the wider community as a weight loss drug. The initial attempts at least came with some pretty dramatic unwanted effects. So you had to have daily injections, and that's really unappealing, especially for non-diabetics. Diabetics are already potentially getting those sort of injections anyway. Also, a stiff helping of nausea, vomiting, diarrhea, all that kind of fun stuff. So while they did work to encourage weight loss, unsurprisingly, they weren't widely adopted. 

The more recent versions of it, they're finding better ways to administer their drug. So it's a longer lasting impact. It is down to weekly injections for the most part and fewer of those unwanted effects. An oral version is very likely coming that will present its own set of problems which you may – which we should discuss at some point. But that is, I think, a prerequisite for this being really widely adopted. That's what it is that's got the market so excited when it looks at a company like Novo Nordisk and quite fearful when it looks at some of the companies that have been beneficiaries of that obesogenic environment. 

[00:07:37] SJ: Yes. So this has really been boiling away in the background here for quite some time. Some fairly significant trials going on in the general population, and some really quite sensational is probably the right word for results from people going onto these drugs and typically losing 15 to 30 percent of their body weight over a two-year period. They initially started with pretty short-term trials. They've recently just released the data on some ones that are two years long and seeing not only that first year effect but that as long as people stay on the drugs, they keep losing weight for an extended period of time. 

[00:08:13] GB: This is important to point out. The people that are most resistant to other forms of interventions, right? Obviously, by the time you're very obese, and you've been told lose weight by eating differently and exercising and all these other potential other interventions, these are sort of resistant cases. I think that's really the starting point for this. This is quite an amazing advance. We've always used the term there's no magic pill for. I guess the thing that pops into my head most when I'm thinking about that is a pill that lets you eat whatever the hell you want. I'll put inverted commas around that because that's not quite right. But let you eat what you want and lose all this weight without some of the effort and difficulty that goes into doing it via a lifestyle and diet approach. 

So, yes, it's quite amazing. We're going to argue that we can take that too far at times, and we can get overexcited or over fearful about the consequences. I think that's right, but this is a very major step forward and something to be touched upon.

[00:09:09] SJ: I'm actually with you on this. I do think this is potentially a society-changing drug. Unlike some of the other innovations that have come along across the years, it's actually been in use for a long period of time. Yes, they've had to tweak it, play around with it to try and get it more palatable to a wider percentage of the population. But if people are going to be dropping dead from use over 10-year periods, we would know that now. It is effectively the same drug as the stuff that's been used since 2003 in diabetics. So there are a lot of people that have been on it and a lot of data about that. 

Now, I think some really, really encouraging results, especially, as you point out, for people that have tried a lot of things. Where I think a lot of people forget is the effects of the obesity are extreme as well in terms of likelihood of dying from cardiovascular disease. Your life expectancy is probably 15 or 20 years less if you're in that plus over 30 BMI category that's categorized as obese or severely obese. The cost to society and the cost to those individuals is very, very extreme from the status quo. So you can even –

[00:10:19] GB: Who can take some risk in terms of –

[00:10:21] SJ: Even if there is some risk here for those people, I think there are a huge amount of benefits. It's really positive and encouraging. There's some bizarre stuff happening out there at the moment. There's a lot of eastern suburbs of Sydney influences getting drugs that they shouldn't be getting that are meant for diabetics because this stuff is in extremely short supply at the moment. 

The technology has come along, and then there's this wave of publicity about it that has sent it really, really mainstream. It's all over TikTok and Instagram and people talking about these drugs. Not surprisingly, that has sent the share prices of the companies that make them through the roof. It has also really impacted on the share prices of companies that are beneficiaries of what has been a very long-term trend towards more and more obesity in society. I think to your point about people trying things, I think as a society, there's been a lot of things tried over the past 50 years. It has been simply in one direction in terms of levels of obesity. You would have to say now it's pretty well known what the lifestyle changes need to be for people to not get into that state, and it's just not happening, so. 

[00:11:29] GB: It sort of applies to type 2 diabetes management as well, right? There are – not all these things are lifestyle-resistant let's say. You can do a lot without even taking insulin or medications for type 2 diabetes. 

[00:11:44] SJ: Yes. Look, I think this is a fascinating story that's out there at the moment. It's something worth people reading up on and learning about, just for interest sake. But it's also impacting the stock market in a fairly significant way. The stock that most Australians would be familiar with that's been hit really hard is ResMed, which makes sleep apnea treatment, and the bare case there being that significantly less obesity in society means significantly less sleep apnea. Therefore, ResMed is worth a lot less money. It's hit the share prices of companies where that relationship is pretty obvious through to knee replacement companies. It's really become find the next –

[00:12:23] GB: Snack Foods. 

[00:12:24] SJ: Find the next sufferer from this. Yes, Snack Foods is another good one. Fast food restaurants, it's been pretty widespread in terms of investors running around, trying to find the next thing that's going to suffer because of these drugs. So I think we're both of the view that this is a pretty important development for society. But how do you think about it when it comes to some of these businesses that they've been great businesses over a really long period of time, partly because they're doing good things in the world and partly because the trend has been their friend in terms of more and more people needing the services that they're offering?

[00:12:55] GB: I mean, you – probably the best point to start here is that research piece that you’ve sent me from Morgan Stanley where they interviewed a person, I think, in America who runs a sleep center and has 2,000 patients, 200 monthly stats. I think that number at first just tells you something about compliance with the technology of something like a ResMed, right? You're bringing on 200 new customers a month, and you've only got 2,000 customers. You've got 10 months’ worth of customers basically. So he could be growing very quickly. But the reality is that it’s fairly common across the industry. People trial it. A third of them say, “No bloody way am I using this.” Other thirds say, “Yes, I'll get it,” and then they don't use it properly. Then maybe a third don't want to be lifetime users because they like it, or they're able to deal with it. 

[00:13:41] SJ: For people that don't know what ResMed's product is, it's a machine that you use at night time, along with a mask, that will basically help you breathe. Sleep apnea is where your throat relaxes when you sleep. It closes up. You can't breathe properly, and you keep waking up. Sometimes, 20 to 30 times a minute people are waking up. Your body –

[00:13:59] GB: Yes. That’s sort of severe account. What it does is push oxygen then down to open a way and feed oxygen into your lungs, obviously. 

[00:14:07] SJ: It has got better, I think, in terms of the comfort of wearing it. But it is still – for a lot of people, putting a mask on every night is still a significant burden. 

[BREAK]

[00:14:17] ANNOUNCER: Stay tuned. We'll be back in just a sec. Are you a long-term investor with a passion for unloved bargains? So are we. Forager Funds is a contemporary value fund manager with the proven track record for finding opportunities in unlikely places. Through our Australian and international shares funds, investors have access to small and mid-sized investments not accessible to many fund managers in businesses that many investors likely haven't heard of. We have serious skin in the game too, meaning we invest right alongside our investors. For more information about our investments, visit foragerfunds.com. If you like what you're hearing and what we're drinking, please like, subscribe, and pass it on. Thanks for tuning in. Now, back to the chat. 

[EPISODE RESUMED]

[00:15:00] GB: So according to this guy that owns the sleep center, maybe 80% of his patients have a BMI, a body mass index, above 25, which puts them in the overweight or obese category. He thinks that most of them are going to end up on GLP-1 inhibitors at some point. I think the end case here is that weight loss associated with that use would lead to a 50% reduction in the instances of the machine having to kick in in terms of the number of episodes per hour or minute or however you measure it that even a 20% reduction will be dramatically improvement to quality of life for these people, and that it would be irresponsible basically not to put them on the drugs. He thinks that a 20% reduction in machine use or being prescribed that machine, I think, is sort of the number he was working with, which sounds reasonable, I think. 

[00:15:53] SJ: Yes, over a long enough period of time. I think some of the hurdles to that happening in the nearest term are just supply. Actually, making enough of this drug is a problem. It is very expensive at the moment. 

[00:16:04] GB: Yes, and weekly show shots. I mean, most people aren't going to want to bother with that. It's going to be an oral version that changes the game. 

[00:16:11] SJ: Yes. I think I read that you need 10 times the amount of active ingredient for an oral version of it that you need from injection because your body just passes a lot of it through when you take it orally. So given the supply constraints, I think that product is some years down the track. But these issues will be overcome. I think the benefits for society here, it's not covered by insurance at the moment. But surely, that is only a matter of time until the insurance company says it's costing me all of this money to treat people for the problems that they have with obesity. If I can fix that, then I'm going to end up in a better place. 

So I think all of those problems will go away. It will take time. But if it is as effective as people say, then you would think it could be a meaningful percentage of the population that's on this stuff. Presumably, that is going to have an impact for demand for the likes of ResMed. We've recently added this stock to our portfolio, our Australian shares fund, and we're having a decent look at it for the international fund as well, as listed in both the US and Australia. I think that bare case is all going to have an impact on this company's business. But the magnitude of the price decline here has been extreme. It's now trading at the lowest multiple it's traded in in eight or nine years. 

Its main competitor, Phillips, is in a complete state of disarray. They've had their whole product withdrawn from the market. So at the moment, ResMed has the whole market to itself and is really struggling just to meet the demand that's out there. For me, I do think this is going to remain a really important part of the whole package of solutions here. People losing even 15, 20 of their body weight is not going to make sleep apnea go away. For most of them, it's going to be a combination of still needing to use a machine like this but being much healthier than you were before. Like there are lots of people that have compliance issues. 

On the ResMed side of things, there will be plenty of people that, like you said, don't want to take the drugs, that have adverse reactions to the drugs as well, or that go on them for a period of time. Lose weight, go back off them, and put the weight back on. There's actually been quite a bit of evidence that people are putting more weight back on when they start taking it than they had on originally. Sorry, when they stopped taking – 

[00:18:19] GB: It's hard to tease out that versus the fact that everyone's getting fat over a year anyway, so. 

[00:18:23] SJ: Yes. No, for sure, for sure. But, yes, it's the type of thing that if 30% of the population ends up taking this thing, it's hard to imagine that there's not going to be –

[00:18:31] GB: No. I think that – I mean, especially, I even think maybe not within the core market right now. But the potential target market that you're sitting here, looking at a stock like ResMed, saying there's a lot of people with undiagnosed sleep apnea and potentially mild or medium rather than really severe. But the general trend is people get worse as they age, and they get fatter, and their muscle conditioning drops off. There's a lot of potential customers that might find an alternative route now rather than ending up in that ResMed system. 

Whereas I don't think someone going from having 50 hypnotic – hypnotic? Whatever. Shortage of oxygen instances 50 an hour or whatever it is down to 25. No doctor's going to say you can get off your machine now. It really has to go down below into really being a non-existent thing before anyone's going to recommend that I would think. So I think the existing customers are sort of safe in that ecosystem. But I'm a bit worried about the potential growth market getting chipped away at. 

[00:19:33] SJ: Yes. I've been worried. This business has caused me some concern. It’s been in the – there was a chart out that – did you post it or have you – someone posted it on our Slack channel the other day about the 30 most successful investments that you could have made in the world over the past 30 years and some fairly obvious names on there like Apple and Amazon. Monster Beverages was number one. We've talked about that a little bit in relation to our Celsius investment. 

But ResMed is on that list about halfway down. It has been one of the most successful investments in the world. I have for a lot of that journey followed it pretty closely and just being worried in terms of the multiple that I was prepared to pay for that business because the potential for someone to come along and just do something that doesn't have that inconvenience factor associated with it just worried me all the time. I do, and I think it's one of the big pluses here. It's getting better and better. I think in terms of the current treatment, in terms of pushing air into your lungs, I find it hard to imagine someone usurping them because they now are so big, have so much money, have so much data with which they can keep improving their own product. 

[00:20:39] GB: It has to be an alternative [inaudible 00:20:41]. What worries me is that, like I said, maybe 70% of people that trial this thing, they adopt it and then drop it. Or they just hate it and walk away from it after their trial, right? It's not proving to me that it's adequately solving the problem for most people. That's why I've been worried about alternative technology. 

So, one, it might not be obvious to everyone, but it's not right to think exclusively of the causation being get obese and get sleep apnea. It is a problem with malformed jaws and insufficient airway space, which is dramatically worsened by weight. You can put on weight because you're not sleeping properly, right? I think best to think of it as a cycle, rather than a one-directional correlation and causation. Some of the alternatives are more directly trying to address that. So mandibular surgery to expand the archway of your upper jaw is one to make room for your tongue to sit in the right spot, rather than to fall back into your airway space. It is very, very intensive according to all accounts and not a pleasant thing. It really does take over your life for like 6 or 12 months. So I don't think that's ever going to be particularly widespread. 

The other one that we keep an eye on is Inspire, which is an American firm, med tech firm that is an implanted device. So I believe there's – a part of the device goes into your collarbone, and the other part goes in under your chin. The point of this thing is to recognize there's an apnea event going on, and it sends a mild current. It makes your tongue sort of straighten out and get out. So it's sort of managing the collapse of the airway more directly, rather than pumping in there to do it. Again, like this is pretty intensive surgery. You can't get that surgery if your BMI is too high. So it's sort of a little bit self-defeating on that. So their argument is that these sort of drugs can actually help expand their market. That doesn't necessarily apply to ResMed. But I've always been worried about alternative technologies. We had an eye on that Vivos Therapeutics in the US, which I thought maybe not quite the right word. But I don't think that product works. 

[00:22:50] SJ: It may be the right word. 

[00:22:52] GB: Yes. I feel like that they – there is concern for – I have concern that a better mousetrap gets invented. 

[00:22:59] SJ: Yes. I would agree with that. I don't think that concern ever goes away for me. I think that's true in a lot of technology businesses that you sit there and say you're fixing an amazing problem at the moment. I think within your space, there are huge benefits to scale that you do get to plow more and more money into R&D. This technology has been life-changing and saving for a lot of people that do stick with it. 

You and I have got a friend in common that swears by it and carries it with him all around the world. That whole thing has got smaller. The machines are tiny now. The masks are much more comfortable than they were. They've got better and better. It's an investment that I'm happy to understand that risk. Manage it through portfolio waiting in that this would never be a seven or eight percent of portfolio for me because I think you could wake up in 10 years’ time and say this product was displaced. But I think it's unlikely enough and that the market is big enough. 

[00:23:53] GB: Price is the best defense, right? Like it's – you don't want to be paying 70 times earnings to something like this maybe. But at some low enough price, it makes sense, right?

[00:24:02] SJ: For me, that is here. I think at 20 times earnings, it's very, very interesting. Again, given what's happened in the competitive space, all of the analysis says Phillips is going to be allowed to start selling its product again soon. But you would imagine that a product that has been withdrawn from the market because of defects is going to struggle against one that's been around that whole time. 

[00:24:19] GB: Yes, if you've got any insight on this. But like the way the sales pitch works in this industry is a little strange I think, isn't it? I mean, are the people that are recommending this to you always after the best solution for you? Or are they sometimes worried more about their commissions or however they're getting paid? 

[00:24:37] SJ: Well, I'm sure there's a lot of the latter going on, which is the truth across the whole med tech space. Yes. But anyway, I think it's an interesting story. I think it's a potentially societal-changing drug, and there's a whole bunch of stocks. Most interesting for me at the moment is to try and find what I think are the overreactions to it because this is going to take time. I think it's going to cost a lot of money for the foreseeable future, and it's not going to solve anything like all of everyone's problems. 

The widespread selling of the whole sector is what's creating a pretty interesting opportunity at the moment. So this is the one that we're most familiar with, but there's a bit of work going on just in terms of trying to find other businesses where the punishment method out has been far, far too severe for the impact or the probability adjusted impact on the actual underlying business. 

[00:25:27] GB: This is one of those areas where I'm prepared to take a little punt, which is I think that this will end up being an important treatment for the severely obese and maybe a non-event for the mildly overweight. I think you're taking on whatever those downsides are regardless. The payoff for the morbidly obese is much, much higher than for someone that's got 10 pounds to lose or 5 pounds or whatever it is. I think that's probably the way this goes here. 

I mean, one of my concerns here or if I had to forecast what would go wrong here, it is around the muscle and bone mass loss that's coming through. So we don't have a lot of data because mostly these people are being measured by body mass index, which is agnostic to whether you're losing fat, bone, muscle. But some people have gone through DEXA scans before and after, and it seems to be falling that like 60% of the loss is coming from fat. The rest is coming from lean body mass. We know that has significant complications, especially as we age. Sarcopenia can directly kill you, but it can also indirectly kill you via hip fractures, falls. It can massively impede quality of life as well. So I think that at some point there will be some notice that there are some significant side effects here, and there'll be a certain class of people that will be wise not to take it, so. 

[00:26:44] SJ: I mean, it has to be the case that the composition of what you do eat. Your hunger is going to be restricted. You're not going to want to eat as much as you used to want to eat. The composition of what you do eat becomes even more important I would say in terms of getting the nutrients that your body needs out of that food that you're eating. So if you take it as a license just to go and eat chips every day and processed foods, then I would imagine that the health impacts of that are going to be very, very consequential. 

[00:27:09] GB: They have talked a lot about like the treatments being a combined drug and lifestyle. So if you can take care of someone's intense cravings, they are much more likely to be able to go for the carrot over the Big Mac. 

[00:27:23] SJ: We own Viva Leisure in our Australian fund as well, and people were talking three or four months ago about less people going to the gym because this drug was there. They're seeing through these studies that people are actually more likely to exercise. It's pretty obvious if you think about it that you’ll lose a bit of weight. You feel a bit better about yourself. You can even just do the exercise. You can physically walk further. You can go to the gym and start doing a few things. I think it has the potential to be positive for a lot of that sort of stuff rather than negative. 

We're running a bit long here I think, but we'll just wrap up really quickly, just the reaction to this. Like I said, it's sort of been around for a while. People have been talking about it for a while and in the space over the last two months. The stock market's gone crazy about it. Stocks have gone through the roof. Other stocks have been hammered in terms of their share prices. It's all over social media, people talking about it. It's become something of a stock market craze. The AI craze was – it's still going, but it was only six months ago. There just seems to be this impact on markets now of frenzies being more and more and more frequent. 

[00:28:26] GB: Intense. 

[00:28:26] SJ: Yes. 

[00:28:27] GB: I think that the market is generally getting more and more efficient. But then the periods where it loses its mind for a short period of time, it's just more dramatic and more – that sort of makes some sense. Fewer and fewer people are actually trying to think critically and just index or whatever it is. 

[00:28:42] SJ: I'm not even sure how much mind-losing there is going on. It's almost a very intentional – there's an old school pump and dump sort of thing going on here where there's a bunch of people that know if they can get the momentum up on social media enough. 

[00:28:56] GB: That's fair. 

[00:28:56] SJ: It's the old George Soros quote, “When I see a bubble, I jump on it.” The first thing he does when he sees it early. I think it's – they're quite sophisticated networks of people that are trying to get this thematic going and then get the average retail punter to be the last one in. 

[00:29:12] GB: The last players tend to be. The last players on the bezel side tend to be the gold miners in Australia, right? They became dotcom companies 25 years ago, and they're probably looking at converting into AI or GLP-1 inhibitor type businesses at the moment. 

[00:29:29] SJ: Take your R&D budget and apply it elsewhere. But, yes, it's a fascinating dynamic in markets. I do think it's happening really quickly, and it's creating good opportunities for the long-term investor. In some cases, ones that can unwind really quickly as well in terms of making your money in a pretty short period of time on the other side of it. 

[00:29:47] GB: In fact, you'd have to – in the way the market's structured now, I think you'd have to be worried if you didn't sort of see a relatively quick payoff. They lose their mind, and then they regain their senses is, well, certainly my thesis around the whole thing. 

[00:29:58] SJ: I would agree with that. I would agree with that. Even at the mega cap end of the market, you saw alphabet back in January. AI is going to kill Alphabet’s business. The share price is down 20%. Two quarterly results later and everything's fine, and you don't need to worry about it. It's happening at the mega cap, but you can take that and multiply it by the smaller end of the market. Yes, that's my view here. I think you're probably right about that with ResMed, if in two or three years’ time, you're actually starting to see it turn up in results and numbers, and people are still talking about it, then it's much more of a significant concern than two or three quarters. I think you're a decent chance here if the results are being good, and everyone's worked out that this is going to take a long time and have –

[00:30:37] GB: Then they're focusing on the side effects of the drug and –

[00:30:41] SJ: All right, G. That was a very enjoyable chat. I hope you've enjoyed it out there. We'll wrap things up for today, and we'll be back in another month's time. Thanks a lot. 

[00:30:49] GB: Thanks, everyone. 

[END]