Beyond GLP-1s: Investing in the Peptide Boom

SPEAKER_1 (0:00)

For more, let's welcome in Bill Birmingham, the head of research at REX Financial. Bill, I have been waiting for this conversation. I love the GLP-1 space. I find it so fascinating. But even more than that, peptides and perhaps maybe the misconceptions around them. So before we dive into the ETF itself, I want to make sure we make the distinction of what peptides are and the difference between peptides are actually used in proper medical scenarios versus this wellness peptide injectable trend that a lot of people are familiar with on social media.

Bill Birmingham (0:38)

Yes, absolutely. We are very excited about this fund as well. We think that peptides have earned their place in the investment spectrum of pharmaceuticals as a new modality, not only just for the GLP-1 trade, which is very exciting as you say, but also for their potential now to treat a broader array of other major chronic diseases.

You quoted the number of adults that are currently in the United States that are on GLP-1s. If we look at that number and scan out globally, just roughly speaking, only 2 percent of obese adults globally are treated today with peptide-related treatment. We think that there's still a tremendous amount of demand in this space for this particular issue, as well as the fact that the pharmaceutical companies are now racing to bring these other treatments to market. So we can go into why peptides, why now, and all the other questions that you have about the gray market, but it's nice to say that we think that the time is now for this particular molecule and the companies that make them, for investors to look at them.

SPEAKER_1 (1:46)

Yeah, and when people think about peptides, I mean, it's important to mention here, insulin is a peptide. The primary ingredients in all of these GLP-1s, which we widely talk about as weight loss, but as you so aptly highlighted, were most of them originally created to treat diabetes. So much broader applications here. At REX, when you were running the research around creating PEPT, is that what you're, how you're calling the ticker PEPT for this ETF?

How are you looking at it? I mean, you know you say right now is the time, but what's your expectations here as peptides are becoming a big part of the conversation? I mean, just over the summer, the FDA recommended for approval six additional peptides that aren't currently approved for treatment on the markets.

Bill Birmingham (2:32)

So that is a very good point. And just to take a step back to your original comment about insulin. Insulin is the original peptide treatment. It was developed in the 1920s by Eli Lilly. It's been in the market for now almost 100 years or just about 100 years. But what was interesting about that is, while it was the original therapy for people, it still required self-injection. So people were essentially administering their own medical procedures themselves using needles and vials. And the potential for both overdosing, underdosing and just a psychic stigma and using needles made that what they call modality in the pharma space, very difficult to scale into a consumer product. And if you look at the history of peptides, this is where kind of our research dove-tailed into the product. You know, when GLP-1s hit the market, while they're not new, because insulin has been around for a while, and even GLP-1s have been around for a while treating diabetes, what the interesting kind of breakthrough was, was the fact that when you put a peptide into your bloodstream, your body removes it within a matter of hours, if not short. That is issue number one. And issue number two is if you try to take it into a pill form, because these are just amino acids, which are the building blocks of protein, your digestive system also gets rid of the peptide. So it's very hard to get these into the system. And the drug companies, which GLP-1s, experienced kind of an iPhone moment. They had a large number of independent breakthroughs that they all brought together, whether it was the dispensing pen, removing the needle, whether it was the fact they engineered peptides that could last in the bloodstream for a week, whether it was the fact that diabetes research showed a decade of safe and reliable results on weight loss that allowed it to be treated for obesity. And then there was the fact that obesity itself became a disease that doctors could prescribe against. So all of these things came together to create this very interesting product that again allows for investors to get broader exposure, not just to GLP-1 but others. And the last thing I'll say on this is if you look at this kind of in the spectrum of other drugs, people say, well, how is this different?