Only pure play medical food play company in GLP-1 and Long Covid Marketplace
Wellgistics Health (NASDAQ: WGRX) just announced an agreement with Tollo Health that addresses the muscle wasting side effects of GLP-1 antagonists and a medical food for the treatment of Long Covid. While many pharmas like Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO) are trying to develop drugs to treat the side effects they created from explosive weight loss, WGRX has found a medical food solution to roll out to its ecosystem. The reason this announcement is so significant is because Wellgistics has a first mover advantage that is expected to mitigate the side effects of prescription GLP-1 antagonists. WGRX’s partner Tollo Health also has another notable Medical food product that is designed to manage Galectin-1 and Galectin-3 associated infections thought to be the crux behind Long Covid..
While the press release cites Tollo Health’s expertise in muscle loss it doesn’t expressly name the scientist behind the muscle wasting who happens to be a key opinion leader in the field. Dr Stephan Von Haeling is a professor of metabolic cardiology at the University Medical Center Gottingen in Germany. His field of expertise revolves around the loss of functional tissues attributable to sarcopenia otherwise known as the gradual loss of muscle mass due to age.
Tollo Health’s other medical food also has tremendous potential in the Wellgistics ecosystem. Galectovid was designed as a medical food to counteract viral infections. In the Wellgistics ecosystem it's very likely that they will replace ineffective antivirals like Pfizers (NYSE: PFE) Paxlovid and Mercks (NYSE: MRK) Molnupiravir and substitute them with medical foods like Galectovid when patients experience viral infections. Literature suggests that galectin antagonists which block viral entry are superior to the existing antivirals.
Investment Summary
Greater efficacy, less side effects, and easier access are all hallmarks of the Wellgistics pharmacy platform. This aggressive move by WGRX to go after higher margin treatment regimens illustrates this management is acutely focused on driving higher margins and incremental revenue growth. The company’s move to acquire high margin medical foods demonstrated management's discipline in executing its business strategy. The recent IPO was heavily shorted from the outset which means a squeeze is imminent, but if the company continues to execute by adding on new higher margin drugs into their ecosystem a unicorn valuation could be in their future. WGRX is ultimately an execution story, but the low float, insider lockups, and large discount to the IPO price of $4.50 make it a technical buy ready for a squeeze higher.
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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. A guest contributor wrote this article and solely reflects his opinions.
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