# Biotech FDA Chaos and GLP-1 Earnings Outlook

**Podcast:** Motley Fool Money
**Published:** 2026-02-02

## Transcript

Is biotech getting unfairly ignored?
If you're listening, it's Molly Fool Money.
Welcome, fools.
I'm your host, Tim Byers.
And with me are two of my longtime rule breakers teammates, Carl Teal and Tom King.
Thanks for being here, guys.
Yeah, it's great to be here.
Great to be here.
We're gonna preview some biotech earnings.
We're also gonna check in on one that reported this morning, and we're going to paint a picture of an industry that probably deserves a little bit more love, a little bit more attention.
So get your coffee ready because it's biotech time.
Let's talk about biotech approvals, Carl, um, and what's going on at the FDA, because it does seem as though things are a little bit um let's call it turbulent.
Let me just paint a little quick background here, which is that 2025 was an absolutely tremendous year for the industry.
I don't know if many people realize this, but biotech as as a whole, the XBI, for instance, outperformed NVIDIA in 2025.
It was a it was a very strong year after a very, very long bleak period.
And so I do think there's actually a lot of enthusiasm continuing into 2026.
Uh, but I don't I don't know what it is about me, Tim.
I gotta throw cold water on stuff.
I just want to sound, you know, there's there's a few alarm bells or a few flags out there that I think you know are interesting and that people need to be aware of.
And and one of them is the the sort of continuing chaos, I guess, that we're seeing at FDA for for want of a better word.
Well, and it does seem as though there is a there was a warning from one of a a former senior executive here.
I think this this man's name is Richard uh Pasdur, who is the former longtime head of the the oncology division.
I've often heard you talk about the JP Morgan conference, Carl, that and how important it is to the biotech industry.
But sounds like he had some spicy things to say at that conference.
Yeah, he did.
And this is this is just uh a couple weeks ago in in January, mid-January.
I mean, he's not, he wasn't just the head of oncology, he is one of five people who headed up CEDAR, the uh main drug approval division.
So kind, kind of you know, extremely senior position at FDA, one of five people who did that during 2025 because there was so much turnover in the in the uh role.
And, you know, one of the things that he told the big pharma people at the conference was that he was worried that the firewall of uh between political appointees and drug reviewers uh uh has been breached, is was was his quote.
And uh that the pharma industry is continuing to underestimate the damage that's already been done.
Now, you know, you can certainly dismiss that as the thoughts of a long-serving bureaucrat who doesn't like the changes that he's seen at the industry.
But you know, what he called chaos, and whether that's the results of just turnover or politics or anything else going on, it does seem to describe some of the uh, you know, seemingly contra contradictory approaches that we're we're we've been seeing to regulation recently.
I mean, there we what's interesting here is that um, and and especially when you say that, it makes me wonder that some of the companies we would look at for the biotech side of the scorecard and rule breakers that are dependent upon the FDA for fast approvals of promising drugs that are in clinical trials, and then suddenly there's there's a bit of maybe some extra risk here.
So, can you talk me through when he's when he's talking about that?
Is he talking about longer approval cycles?
Is he talking about inconsistent approvals?
Like, what's the risk here for companies that we follow?
We can think about it as just trying to read the tea leaves on how the agency is gonna res gonna um regard various submissions, right?
And I think one area, so so I I think you have these two different sort of themes going.
And one is that that um under Martin Khari, the current commissioner of FDA, he has been very, very forward looking about how he wants to speed approvals, how he wants to make this easier for industry.
And that's something that industry is super enthusiastic about.
And so that includes everything from you know, there's there's been talk about doing less animal testing.
There's been talking about having easier standards for rare diseases where you can basically get on the market for with a single study as long as you have some confirmatory evidence, which would would make that faster and easier.
There's been talk about a a quote, plausible mechanism pathway, basically, where where the agency could approve drugs based on limited clinical data.
Basically if the biology makes sense.
So, you know, think about it's like if you have a disease that's marked by ends an enzyme deficiency and you give them the enzyme, that kind of makes sense that that would work.
So, you know, that when you have that kind of plausible mechanism, you can take basically less data to support it.
These are all things that industry is super excited about.
The thing is, there's sort of an operating reality on the ground that seems to be coming out differently than that.
And that's that's where I think there's a lot of confusion right now, is because in some ways the FDA actually seems to be raising the bar on rare disease rather than lowering it.
And we've seen that come out in a few different ways.
Well, let's talk about those.
Like, I I would love a couple of examples here of where this is because what we want to understand as investors is do we need to be more careful about the types of biotech companies we're looking at here because what we thought would be a reasonable approval cycle is no longer.
So, what what are some examples of what we're seeing in the industry right now?
Yeah.
So I, and you said what types, what types of products or what types of approvals.
And I think that's that's uh a very good point right there.
A lot of controversy seems to come, particularly around things that go through the um the sort of the the CBR, the biologics division, the so gene therapies and cell therapies, things in that space seem to be particularly unpredictable right now.
And so uh we just saw that this past week, uh a company called Regenix Bio was expecting approval of a drug on February 8th for a uh uh disease called Hunter syndrome.
That's almost certainly not going to happen now.
And and what's interesting is that it's because a different drug, a different gene therapy, um, had a uh a complication come up in clinical trials that basically they found a tumor that had developed in somebody that had been treated with the drug four years ago, and so they put it on clinical hold to investigate that further.
Now that's um, and I want to point out this these are bad fatal diseases, right?
So you you have some there there's some tolerance for for uh side effects and bad outcomes and stuff with therapies when you're addressing a fatal rare genetic disease, right?
Sure.
And so this was a benign tumor, but a tumor nonetheless that developed in somebody who'd been treating four years earlier.
Unclear if it's related to the the gene therapy itself, but certainly a red flag and and and putting it on hold to investigate that is is called for.
That's the that's the right call.
What's weird is that they put another drug that is just about to g get approval, supposedly, on hold because it's similar.
There was no evidence of problems in that.
It it it uses a somewhat different vector.
I mean, all these things use slightly different vectors, even if they're all technically um in the same class.
It seems to contradict what FDA had been saying previously, which is that they were going to be more tolerant of these fatal rare diseases, and that's not what we're seeing.
Last point on this, um, or last question, I guess I should say before we move on to our next section here.
But does this make you raise the bar for what we would consider a reasonable biotech investment and say like like rule breakers?
Like, do we need a bit more um a bit more development, like a a biotech company that's more mature before they make it to the scorecard?
Or does this really not change anything?
I think that you have to realistically put extra risk around anything in the gene therapy, cell therapy space.
Okay.
Um, you know, I I mean, we're just seeing that.
We've seen it too many times at this point to not recognize that.
I still think there are some really, really interesting possibilities in that space, but um you you know, you have to maybe build in extra timelines for more questions for things being delayed and stuff like that, unfortunately.
On the other hand, you know, we may finally start to see some things get sped up.
And we can talk about that a little bit maybe in our next segment.
Okay.
Tom, any any thoughts on this?
Does it does it make you more or less interested in in biotechs to bring to to the scorecard?
You know, I think call said it pretty well.
I think we've seen um the current skepticism around uh vaccines and mRNA-based therapies.
So that I think call put it pretty well.
You just gotta you just got to factor that in into your risks when you consider the sector and those particular uh subsectors within the biotech industry.
All right.
Still like biotech, maybe lengthen your timeline for how long you're gonna uh stay invested in in these companies.
Up next, we're gonna do some biotech earnings predictions.
Stay tuned.
You're listening to Motleyful Money.
By action it is in my extrem niedrige Preise.
Action, kleine Preise, große Freude.
All right, we are back with Carl Thiel and Tom King.
I'm Tim Byers, and let's start with some earnings predictions here.
We've got some big names that are reporting this week, guys.
And I'm gonna start with uh Eli Lilly, ticker L L Y, and I'll give you some of the background on this.
This is a this is a big company, and they have uh like for for some others, we're gonna get into another one here, but uh weight loss drugs, oh boy, that has been a a big driver for for Lily.
Uh earnings per share, consensus estimate, a range of six dollars and ninety-nine cents to seven dollars and eighty-six cents.
The consensus consensus estimate is seven dollars and forty-eight cents, revenue of seventeen point eight five billion.
Roughly, I mean, this is over 30% relative uh earnings growth year over year.
So big numbers here.
Tom, I'll start with you.
Are you expecting a beat, a raise, or a miss for Eli Lilly in its upcoming quarter here?
They're gonna report, I believe, on the fourth, so Wednesday this week.
What do you think?
I'm gonna go with the beat because I think that guidance is always arranged so that it's possible, easy to more likely to beat.
So that would be my guess.
Yeah, so low, low bar, set the low bar and leap over it.
Carl, I mean, when you look at the the Lily business, I mean, I assume it's way, way bigger than just weight loss drugs.
But is this still like is this the weight loss trade?
Is that what Lily is?
Yeah, it effectively is.
And first of all, I just have to say, by the way, I love that you're you're referring to Lily as a biotech company.
That's such a victory for biotech.
It's like a century old big pharma company.
But it's true.
I mean, it's like like these GLP one drugs, they are biotech drugs, and they are they are in the driver's seat right now.
Yeah, I would put uh I would put Lily down for a beat.
I think they've beaten in last three or four quarters.
I think they're they're in a super strong position right now.
The only thing that could, I yeah, they'd probably a decent candidate to raise too.
The only sort of question mark right now is that um uh CVS pharmacies took terzepatide, which is the active ingredient in both Zepp Bound and Monjaro.
They took that off their formulary uh last summer.
And you saw you saw a little bit of a ripple of it in the third quarter, but this fourth quarter is when we're really gonna see if that makes a difference or not.
That because there were some people switching over to semiglutide uh after that happened, and that could have some impact, but I I think they'll be able to drown that out.
Okay, fair enough.
So we've got two two beats for Eli Lilly.
Moving on, we're gonna move on to Novo Nordisk, another one, I think, that's in the uh, you know, the weight loss trade for lack of a better a better term here.
Ticker NVO, they are also reporting on Wednesday the fourth.
So Tom will come back to you and give you some numbers here.
So the earnings per share expectations are between 89 and 90 cents a share.
That's versus 91 cents in Q4 of last year.
So flat to slightly down revenue of 11.96 billion.
And there is the possibility of a dividend coming into this quarter.
So uh what do you think?
Beat, raise or miss, and I will ask you, what do you put the uh what do you put the odds for a dividend from Novo Nordisk at uh coming into to this quarter?
Do you have a do you have any thoughts on the odds?
Well, in terms of the possibility of uh of a miss, I would probably put that a little bit higher than for Eli Lilly.
Novo Nordisk has been on the back for a little bit the last couple of years.
They've got a new CEO.
Um things haven't been uh they've been having some struggles with various things.
So just for that reason, I would rank the possibility of a miss s slightly higher.
Um and the same sort of logic applies to the initiation of that dividend.
I I'm guessing that in time in a time of uncertainty for them, they'd rather hang on to the cash.
So I would I would say that's probably unlikely, but there's probably there may well be more to it than that.
So less than 50%, I I is what I hear you saying.
Yeah, sure.
Yeah.
Okay.
Carl, with the you know, to beat beat, raise or miss, and I'll put the dividend question to you this way.
Given that Novo Nordisk has been a little shakier, as Tom points out, is the dividend what you do to stabilize things amongst the investors, or is it like let's conserve the cash and go again?
Um I think it's it's I think they would frame it a little bit differently.
They have a new CEO, the first non-danish CEO in their company's history who's already signaled that he's gonna go big on acquisitions.
Oh boy.
Which to me is is uh oh, which which also, by the way, I think they need to do that.
Like Novo Nordisk has been traditionally very, very shy about doing MA, and I think this is a good that would be a good move for them.
But it does that does make the timing of introducing a dividend make a little more questionable to me.
So I would lean towards no on that.
And then for the uh earnings, um, you know, they've already cut guidance twice, I think, in the last year.
So, you know, I'm I'm looking for them to hopefully meet.
It'd be great to see them beat.
Um, I do think they're kind of due for a relief at some point.
But yeah, I'm I'm I'm a sort of a meet or or maybe you know, slightly ahead.
I'd like to see a lot is riding on of obviously their oral weg of the launch.
And that's very recent, so it's a little hard for it to move the needle too too much, but it it will certainly play into their into their guidance uh going forward for the rest of the year.
But the the numbers for oral weg of V have been strong.
So we've got we've got a miss and a maybe a slight beat or or meet.
Let's move on to Twist Bioscience, which is a company that we've looked at multiple times in Rule Breakers.
And Tom, I'm gonna come to you because as we're recording, this is Monday morning.
We we got results.
You know, they did provide some preliminary results.
Ticker TWST on January 12th, and now we have the real results.
So let me ask you were you surprised?
Were you delighted?
What'd you see?
Well, uh, for the quarter, I you know, it was pretty much what they said it would be.
It was a hundred and uh four million in revenue for the for the first quarter of 2026, which ended December the 31st, 2025, which is pretty much exactly what they had uh said it would be when they announced their preliminary results in on January the 12th.
Still unprofitable, but get in better.
The bigger picture here is is more interesting for me, though.
The longer term trend in Twist Biosciences.
Um it's a company that first you know crossed my radar um think in 2020.
Basically, what Twist does is they make DNA for other people.
So you're a researcher, you send, hey, you say to Twist, please make me this DNA with this uh with this code of nucleotides, and they do that, the researcher then puts it into a cell and and sees what it does.
So they're heavily are dependent on research, the level of research activity.
And as we know, and Carl has said earlier in the show, we've been through what you might call a bit of a biotech winter the last few years.
There's been a fair fair amount of pessimism in the industry, uh lack of investment, and so on.
But what impressed me about Trist Twist when I looked over their longer term results is that they've pretty they've consistently growing revenue through this period of the last from a tw from 2020 through to last year, adding about 60 million in revenue per year.
Their rate of cash burn has gone down.
It's still they're still burning through cash, but it's getting a lot less.
I would say from a business perspective, it's doing all the right things.
It's maintained its revenue growth, it's reduced its cash consumption, it's getting towards profitability.
And, you know, the results they released this morning pretty much confirmed that the trend that has played out over the last five years is continuing satisfactorily.
Um so yeah, it's still an interesting company.
It's a it's uh it's a lot cheaper than it was at one point in the 2020-2021 period, it traded at an eye water in 111 times revenue, multiple.
Um it subsequently reached a low of three times revenue in May of 2023.
That was, you know, that would probably translate to a ninety-five percent loss or so or so decline.
Uh but now it's at a more reasonable seven times.
So um, yeah, interesting company.
So, Carl, let me just ask you very quickly on this, and then we'll move to our final segment.
But because this is a company that's in DNA research, is some of the chaos you talked about at FDA, does it apply to a company like like Twist?
Are they in caught in that web of of chaos?
Only indirectly, right?
I mean, they're not really working with FDA directly, they're working with companies, you know, who are trying to discover new drugs.
So they're they're insulated from it.
And yeah, just you know, tremendous technology.
It was a great great beat and raise quarter.
So hopefully they'll continue to have good things happen.
There you go.
All right.
So that's uh Eli Lilly, Ticker L L Y, Novo Nordisk, Ticker NBO, and Twist Bioscience, which reported this morning a good beat and raise.
Up next, we're gonna preview tomorrow's show.
Thanks for tuning in.
You are listening to Motley Full Money.
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All right, we are back with our final segment here.
Just a preview for tomorrow when Emily Flippin, Jason Hall, and Lauren Hurst will be talking about AI and gaming.
Uh they are gonna talk about Project Genie, which, if you have not heard of this, this is an AI model designed specifically for creating 3D worlds.
That sounds interesting.
Honestly, a little bit terrifying.
But it'll be Emily, Lauren, and Jason, so please stay tuned for that.
There are also a lot of biotech earnings that are coming this this week, so please stay tuned for that at the site.
We will have coverage every day for all of the stocks you are following in your portfolio.
Carl, Tom, thanks for joining me today.
Appreciate it.
Good chance to talk some more biotech.
Please come back to do this again.
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I'm Tim Byers.
Thanks to Tom King and Carl Thiel for being with me today.
Fools, we will see you again tomorrow.
Thanks again.
And fool on.