Pathfinders Podcast

Davern Capital sees GLP-1 Opportunities Beyond Obesity

Davern Capital’s founder, Elie Kobrin, approaches the biopharma market from a long/short perspective – but as a former doctor, he also speaks the language of medicine. He explains the fund’s approach and offers insights on hot topics in the current market.

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By Chris McCarthy
Featuring Elie Kobrin, Founder and Managing Director, Davern Capital
Published June 17, 2024 | 2 min read
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Key Points

  • New obesity treatments have further potential in a much wider range of disease areas.
  • Davern Capital tracks changes in the market to inform valuations, mainly in therapeutics.
  • The pricing impacts of the IRA will play out over a long term, with mature franchises especially exposed.

GLP-1s: potential beyond obesity

The success of GLP-1 agonists in treating obesity is transfixing the industry and society at large, but Elie Kobrin’s sights are fixed on breakthroughs yet to come. While excited about the obesity opportunity, the founder and MD of Davern Capital is also anticipating news of further potential applications of GLP-1s.

We think there could be large opportunities beyond obesity for these types of medicines that people aren’t really thinking that much about yet,” he says. “There’s a big late-stage program in Alzheimer’s disease that should read out next year. We recently saw a fascinating paper looking at the role of GLP-1s in managing Parkinson’s disease. And just recently, Novo Nordisk started a new clinical trial looking at GLP-1s and related medicines in alcohol-related liver disease.”

“We think there could be large opportunities beyond obesity for these types of medicines that people aren’t really thinking that much about yet.”

Elie Kobrin, Founder and Managing Director, Davern Capital

Seizing on dynamic forces

These medications typify the type of disruption that attracts Kobrin, a former doctor, and his team in the healthcare-focused long/short fund. The company focuses mainly on therapeutics, as well as some diagnostics and medical devices.

Alongside new drug innovations, Davern also analyzes the effects of external forces, such as new federal policies or drivers of drug price changes. “When we identify those pockets of dynamism, we just jump right in and do a lot of deep fundamental work,” says Kobrin. “One of the best things about investing in this space is the incredible tailwind from all the innovation and secular growth.”

Davern balances sentiment and positioning issues with different investment types: “The diversification that a portfolio approach allows is one of the best ways to deal with that. But one of the cardinal rules is just to have ideas within your portfolio that you’re excited about.”

“One of the best things about investing in this space is the incredible tailwind from all the innovation and secular growth.”

Elie Kobrin, Founder and Managing Director, Davern Capital

IRA will hit mature franchises

Assessing the current state of the market, Kobrin expects the Inflation Reduction Act to have a long-term impact on biotech. “Medicare now has the ability to essentially control drug prices in certain circumstances,” he points out.  “That’s a very big issue, especially for a lot of bigger companies that have more mature franchises.”

Kobrin notes that biotech IPOs have paused after a brief rally in January and February of this year. “We’re coming out of a few years of relatively subdued IPO performance,” he says. “But there’s great stories out there that continue to mature and develop and can make it to the public markets.”


View audio transcript

Featured Guest:

Elie Kobrin

Elie Kobrin
Founder and Managing Director, Davern Capital

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