Will regional banks survive and thrive after the 2023 banking crisis?


The 2023 banking crisis has led to the collapse of some prominent regional banks, raising concerns about the future of this sector. This post will explore the reasons behind the collapse of Silicon Valley Bank ($SIVB), Signature Bank ($SBNY), and First Republic Bank ($FRC), and analyze whether other regional banks such as Pacific Western ($PACW) and Western Alliance ($WAL) are at risk.

The Collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank

Silicon Valley Bank ($SIVB) collapsed in March as part of the 2023 banking crisis due to the overweight of held-to-maturity securities on its balance sheet and a withdrawal of deposits not insured by the Federal Deposit Insurance Corporation (FDIC).

Figure 1. $SIVB non-realized losses on held-to-maturity securities.
Figure 2. Ratio between unrecognized losses on HTM securities and cash equivalents for selected regional banks.

Silicon Valley Bank was acquired by First Citizens Bank ($FCNCA). Signature Bank ($SBNY) quickly followed suit for the same reason and was acquired by New York Community Bank ($NYCB). And just a week ago the majority of assets of First Republic Bank ($FRC) were acquired by JPMorgan ($JPM).

Figure 3. First Citizens Bank transaction overview following acquisition of parts of Silicon Valley Bank.
Figure 4. New York City Bank transaction overview following acquisition of parts of Signature Bank.
Figure 5. JPMorgan transaction overview following acquisition of parts of First Republic Bank.

All three collapsed banks were components of the S&P 500 and large in terms of asset size.

Figure 6. Asset size and development of selected regional banks as a time series.

Leading up to the collapse and in the aftermath the share price of many regional local banks has also suffered.

Figure 7. Development of share price of selected regional banks as a time series.

Does that mean all regional banks are poor investments? And are banks such as Pacific West ($PACW) and Western Alliance ($WAL) particularly vulnerable? Both banks this week had to deny rumors about their imminent sale.

The Financial TimesÔÇÖ report today that Western Alliance is considering a potential sale of all or part of its business is categorically false in all respects. There is not a single element of the article that is true. Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic options.It is shameful and irresponsible that the Financial Times has allowed itself to be used as an instrument of short sellers and as a conduit for spreading false narratives about a financially sound and profitable bank.We are considering all of our legal options in response to todayÔÇÖs article.

Western Alliance press release from May 4th

The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news. Core customer deposits have increased since March 31, 2023, with total deposits totaling $28 billion as of May 2, 2023 with insured deposits totaling 75% vs. 71% at quarter end and 73% as of April 24, 2023. In addition, the company recently paid down $1 billion of borrowings with our excess liquidity. Our cash and available liquidity remains solid and exceeded our uninsured deposits, representing 188% as of May 2, 2023.

Pacific West press release from May 3rd

And since the end of 2022 both banks have increased their proportion of insured deposits (both to 73%) and increased their uninsured deposit liquidity coverage ($WAL to 158% and $PACW to 180%). And since March 20th both banks have actually seen deposits increase despite a further reduction in uninsured deposits.

Figure 8. Slide from the Western Alliance earnings call on April 19th.
Figure 9. Slide from the PacWest earnings call on April 25th.

Furthermore it is unlikely that the FED will increase interest rates aggressively from here and add further press to the fair value of HTM securities.

If no solution is found to the debt ceiling issue, then all bets are off the table. But otherwise based on all of the above I find it unlikely that $PACW and $WAL will collapse the same way their share price has. I also find it unlikely they will be acquired at their current low prices. But whether they will thrive going forward is less certain, as there has been some reshuffling and sales of assets. And congress might impose legislation upon the banks following the recent failures.

Jamie Dimon likewise predicted no further banks will collapse. Below quotes from the May 1st conference call following the acquisition of First Republic Bank.

Well, no crystal ball is perfect. But, yes, I think the banking system is very stable. You guys have reported already on tons of regional banks who actually had good results, very modest outflow. A lot of the deposit outflow was because of quantitative tightening, it wasn’t because people are having runs.

There are only so many banks offsides this way and I think this is – there may be another smaller one, but this pretty much resolves them all. But this part of the crisis is over. That does not – down the road, there are rates going way up, real estate, recession – that’s a whole different issue, but for now, everyone should just take a deep breath.

I was reading all the regional bank reports from you and some of the analysts out there. They’re all mostly – some of the banks are down 2% or 3% – a lot had to do with QT. They were not having runs. The runs were really limited to the people who had too big uninsured deposits and money that can move very quickly and stuff like that. So, yeah, I think that’s over. And obviously, there’s always future issues, but I think that’s mostly over.

Jamie Dimon – May 1st on conference call following the acquisition of the remnants of First Republic Bank by JPMorgan.

Warren Buffett has perhaps expressed the sentiment amongst investors towards banking the best.

I don’t like the banking business as much as I did before.

Warren Buffett – April 12th 2023 on CNBC after selling the majority of the shares of BNY Mellon ($BK) and US Bancorp ($USB) in the third and fourth quarter of 2022 previously held by Berkshire Hathaway.
2023-04-12 CNBC – Warren Buffett on banking crisis fallout and why he sold most of his bank stocks except one


Based on the analysis, it does not seem very likely to me that regional banks like $PACW and $WAL will collapse or be acquired at their current low prices. However, their future performance remains uncertain as they face challenges such as potential legislation and market changes. The 2023 banking crisis has undoubtedly shaken investor confidence in the banking sector, as Warren Buffett’s recent comments reflect.

What happens next following FDA approval of Mounjaro® from Eli Lilly for diabetes?

The FDA on May 13th approved the dual GIP-GLP1-agonist Mounjaro® (tirzepatide) from Eli Lilly for diabetes following the completion of the SURPASS studies (e.g. SURPASS-2 NCT03987919).

Mounjaro® is administered as a weekly injection just like the GLP1-agonist Ozempic® (semaglutide) from Novo Nordisk for diabetes. The table below summarizes products from Eli Lilly and Novo Nordisk that have already been granted FDA approval or candidates still in the drug pipeline.

Semaglutide from Novo Nordisk has also been approved for obesity (Wegovy®) and an oral formulation for diabetes (Rybelsus®).

CompanyDrugFDA approvalAdministrationIndication
Novo NordiskOzempic®2017Weekly InjectionDiabetes
Eli LillyMounjaro®2022Weekly InjectionDiabetes
Novo NordiskWegovy®2021Weekly InjectionObesity
Eli LillyTirzepatidePhase 3Weekly InjectionObesity
Novo NordiskRybelsus®2019Daily OralDiabetes
Novo NordiskSemaglutidePhase 3Daily OralObesity
Novo NordiskInsulin IcodecPhase 3Weekly InjectionDiabetes
Novo NordiskIcoSemaPhase 3Weekly InjectionDiabetes
Eli LillyTrulicity®2014Weekly InjectionDiabetes
Novo NordiskVictoza®2010Daily InjectionDiabetes
Novo NordiskSaxenda®2014Daily InjectionObesity
Selected FDA approved products and drug candidates in phase 3 for the treatment of either type 2 diabetes or obesity.

Phase 3

Eli Lilly has injected Tirzepatide for obesity in phase 3 (e.g. SURMOUNT-1 NCT04184622) and Novo Nordisk has oral Semaglutide for obesity in phase 3 (OASIS-1 NCT05035095).

Novo Nordisk had the long acting once-daily insulin Tresiba┬« approved in 2015 and now has the long acting once-weekly Insulin Icodec in phase 3. Novo Nordisk also has a combination drug of Semaglutide and Insulin Icodec – IcoSema – in phase 3; comparison with Insulin Icodec (COMBINE-1 NCT05352815), Semaglutide (COMBINE-1 NCT05259033) and Insulin Glargine + Insulin Aspart (COMBINE-3 NCT05013229).

Phase 2

Both companies have various candidates in phase 2 for the treatment of type 2 diabetes and obesity:

Eli Lilly – LY3437943 GGG (GIP/GLP-1/Glucagon) Tri-Agonist for the treatment of diabetes (NCT04867785) and obesity (NCT04881760).

Eli Lilly – LY3502970 (GLP-1 Receptor Non-peptide Agonist) for diabetes (NCT05048719) and obesity (NCT05051579).

Novo Nordisk – FDC Sema ÔÇô OW GIP – A combination of semaglutide and novel GIP (NNC0480-0389?) intended for once-weekly treatment of diabetesNCT05144984

Novo Nordisk – CagriSema in T2D – A combination of amylin analogue cagrilintide and GLP-1 analogue semaglutide intended for once-weekly treatment of diabetesNCT04982575

Novo Nordisk – PYY 1875 – A novel analogue of the appetite-regulating hormone, PYY (NNC0165-1875), intended for once-weekly treatment of obesityNCT04969939


The FDA will likely grant approval to Eli Lilly of injected Tirzepatide for obesity and to Novo Nordisk of oral Semaglutide for obesity, so the big difference between Novo Nordisk and Eli Lilly in the GLP-1 space going forward is that Novo Nordisk will be able to offer tablets, and Eli Lilly will only be able to offer subcutaneous administration. Going forward Novo Nordisk continues to look like the stronger competitor in both the diabetes and obesity arena, despite Eli Lilly securing FDA approval of Mounjaro® and also having SGLT2 and DPP4 anti-diabetic products.

Revenue from different GLP1 drugs in different geographies.
Revenue from different diabetes drug classes in different geographies across companies.

Novo Nordisk 2021Q3 – Wegovy┬« bottlenecks

Novo Nordisk continues to succeed in the GLP-1 space with semaglutide (Ozempic®, Rybelsus® and Wegovy®).

Highlights of the quarter include initiation of phase 3a trials with oral semaglutide in obesity and ziltivekimab in cardiovascular disease. Novo Nordisk now has late stage clinical trials in all of their therapy areas.

Highlights of the third quarter and the first nine months of 2021

Ozempic® continues to be one of the fastest growing drugs in the world. It was approved in China in May 2021, but is still outsold by Victoza® there, whereas it is the best selling GLP-1 for Novo Nordisk in all other markets.

Rybelsus® was approved in the EU in April 2020, but it is yet to pick up momentum there. Sales in the US have reached DKK 1,199 (USD 189M).

Wegovy® has experienced an excellent launch with ~17k prescriptions 19 weeks after launch. There are currently production bottlenecks. The CEO hopes for supply to catch up with demand by early 2022. The CEO encourages competition to grow the obesity category. Reported sales are currently lumped together with Saxenda®, but a sales breakdown will be made in 2022 according to the CEO. The STEP5 clinical trial results were released, in which Wegovy® demonstrated significant and sustained weight loss in two-year study in adults with obesity.

Tresiba® is growing in all markets except the US. The growth is happening at the expense of Levemir®. Looking at the US implosion of insulin sales this might lead one to question, whether there is a particularly bright future for glucose sensitive insulin (phase 1) and once-weekly insulin icodec (phase 3a).


With initiation of two phase 3 programs within obesity and other serious chronic diseases, Novo Nordisk now has ongoing late-stage clinical trials within all of its therapy areas. The new phase 3 trials are the OASIS I trial (NCT05035095) for oral semaglutide in obesity and the ZEUS trial (NCT05021835) for Ziltivekimab.


Novo Nordisk acquired Ziltivekimab from Corvidia Therapeutics in 2020 to expand their presence in cardiovascular disease.

The ZEUS clinical trial (NCT05021835) is a research study to look at how Ziltivekimab works compared to placebo in people with cardiovascular disease, chronic kidney disease and inflammation.The study is conducted to see if ziltivekimab reduces the risk of having cardiovascular events (for example heart attack and stroke) in people with cardiovascular disease (CVD), chronic kidney disease (CKD) and inflammation.

It follows the completion of the phase 2 RESCUE trial. The aim is to have at least one CVD product approved and launched between 2024 and 2028.

Oral semaglutide in obesity

The OASIS I trial (NCT05035095) investigates oral semaglutide in terms of weight loss in overweight individuals. The trial has an estimated completion date in H1 2023 just like the SURMOUNT-4 study (NCT04660643) of Tirzepatide in obesity from Eli Lilly. Semaglutide would be the first oral GLP1 in obesity.


Jardiance® from Boehringer Ingelheim and Eli Lilly is the best selling SGLT2 drug and has recently shown consistent cardio-renal benefits in adults with heart failure.

Tirzepatide from Eli Lilly was shown in March in the SURPASS-2 study (NCT03987919) to achieve superior A1C and body weight reductions compared to injectable semaglutide in adults with type 2 diabetes. FDA and EMA approval and launch is expected in 2022. A priority review is expected 8 months after submissions.

Danuglipron (PF-06882961) in type 2 diabetes is a small molecule drug (SMD) and GLP1 receptor agonist. It is being developed by Pfizer and phase 1 results have been published.


Transcript at fool.com.

Blog post on previous quarter.

Reuters summary of the quarter.


Sales of anti-diabetic drugs by geography for Novo Nordisk
Trailing twelve months sales of anti-diabetic drugs by Novo Nordisk.
Sales of anti-diabetic drugs across companies
Trailing twelve months sales of anti-diabetic drugs by geography across a subset of companies.
Sales of anti-diabetic drugs by class
Nov Nordisk trailing twelve months sales of anti-diabetic drugs by drug class.
Trailing twelve months sales of anti-diabetic drugs by drug class across a set of companies.
Sales of anti-diabetic drugs by company
Trailing twelve months sales of anti-diabetic drugs by company. Geographic segment data is missing for Boehringer Ingelheim.
Sales of drugs for Novo Nordisk
Sales of best selling anti-diabetic drugs across companies
Sales of anti-diabetic and anti-obesity GLP1 by drug across companies
Trailing twelve months sales of GLP1 by drug.
Sales of anti-diabetic and anti-obesity GLP1 drugs by company
Trailing twelve months sales of GLP1 by company.
Sales of insulin by drug across companies
Trailing twelve months sales of insulin by drug.
Sales of insulin by company
Trailing twelve months sales of insulin by company.

Novo Nordisk Q2 saw approval of Wegovy® and continued growth of Ozempic® sales

Novo Nordisk sales and operating profit grew at 12% and 9%, respectively, at constant exchange rates. The FDA approved the once-weekly injectable anti-obesity drug Wegovy® (semaglutide) on June 4th.

The figures below summarize the global sales for Novo Nordisk by geography, by drug and by drug class. All geographic markets have experienced growth, but Victoza® and Levemir® have curbed growth in the US.

Within the injectable GLP1 class Ozempic® sales continue to grow at the expense of Victoza®. Within the insulin class Tresiba® sales continue to grow at the expense of Levemir®, although it is less pronounced than within the GLP1 class.

Novo Nordisk can attribute the majority of its growth to the GLP1 class.


The global GLP1 market share has increased from 49.1% to 51.5% led by Ozempic® in all markets, whereas the insulin market share has decreased from 44.6% to 43.9%.

Novo Nordisk and Eli Lilly continue to see growth thanks to the GLP1 class (Ozempic® and Trulicity®), whereas sales of Januvia® at Merck and Lantus® at Sanofi is deteriorating.

An old pencil drawing of Don Quixote and Sancho Panza sitting on their horses, by Wilhelm Marstrand.


The FDA approved Wegovy┬« – once-weekly injectable semaglutide – on June 4th. Wegovy added more than 8,000 prescriptions within the first five weeks; it took Saxenda┬« (once-daily injectable liraglutide) 4 years to achieve the same. The STEP trials showed semaglutide to be superior to liraglutide in terms of weight loss. Wegovy┬« might cannibalize Saxenda┬«. However, 50% of Wegovy┬« prescriptions (TRx) are new to the anti obesity medication class in the US.

Final Remarks

Novo Nordisk is not cheap at a forward P/E of 30. And the current share price does probably not offer the best entry point, but it’s worth remembering that Novo Nordisk has various moats and advantages. It is protected by high barriers to entry for biosimilars, has a long history of organic growth, has a focused approach with diabetes, obesity and cardiovascular diseases, has low costs and has little debt to name just a few.

Novo Nordisk gains GLP-1 market share within and outside the US despite seeing new GLP-1 prescriptions curbed by COVID-19

Novo Nordisk has gained market share in diabetes (29.2%), GLP-1 (49.9%) and insulin (44.5%).

The gain in market share has happened with a change in market value in the US as a backdrop; i.e. GLP-1 up and insulin down. As a consequence approximately 70% of sales in the US did not exist 5 years ago.

Diabetes and GLP-1

In the US Novo Nordisk GLP1s command a 60.2% NBRx and 49.6% TRx market share, which is driven by Ozempic® (once weekly injected semaglutide) and Rybelsus® (oral semaglutide).

GLP-1 NBRx and TRx market share in the US.

The uptake of Rybelsus® has however been curbed by COVID-19, but market access in the US is now approximately 85%.

In a similar fashion sales of Trulicity® have increased by 9% but it has lost market share as a proportion of both prescriptions and market value.

Eli Lilly Trulicity® sales.

Ozempic® might face competition from Tirzepatide in the future.

Eli Lilly Tirzepatide pipeline (part 1 of 2).
Eli Lilly Tirzepatide pipeline (part 2 of 2).

Diabetes and insulin

As already mentioned insulin is deteriorating rapidly in the US, which is thanks to biosimilars such as Basaglar® and Admelog®.

Insulin icodec phase 3 clinical trial results might be available in the second half of 2021.

The glucose sensitive insulin NN1845 has been added to phase 1.


The uptake of Saxenda® has been put on hold by COVID-19 as demonstrated by the reduction in new prescriptions and sales.

A decision on injected semaglutide for obesity is expected in Q4 or Q1. Getting oral semaglutide approved for obesity would be the next logical step. Eli Lilly is expecting their phase 3 primary endpoint results on Tirzepatide for obesity in June 2022.

Visualization of growth in the COVID-19 impacted quarters

The first and second quarter of 2020 were unusual in many ways. More than a third of S&P500 companies temporarily or permanently withdrew guidance for the full year due to uncertainty surrounding impacts from COVID-19 according to FactSet. This article seeks to visualize the growth in each of the two quarters by sector and industry.

The bubble plot below shows the growth in Q1 on the x-axis and Q2 on the y-axis for selected sectors, industries and companies of the S&P 500 and the Russell 3000. The marker sizes represent market capitalization. The colors represent sectors.

Bubble plot of growth in Q1 and Q2 for the S&P 500.
Bubble plot of growth in Q1 and Q2 for the Russell 3000.

Some companies are outliers and are not displayed in the bubble charts. Instead a time series of their revenue is plotted below. Zillow ($ZG) is one of these outliers. In Q1 revenue increased by 148% due to Zillow Offers growing 499%. Vertex ($VRTX) had Trikafta® approved in October 2019 and it is currently one of the fastest growing drugs. Beyond Meat ($BYND) grew by triple digits in Q1. Beyond Meat ($BYND) grew by triple digits in Q1 and is an outlier.

Time series of revenue at companies with revenue growth falling outside the visible ranges of the bubble plots.

Basic Materials

In Basic Materials the copper miner Freeport McMoran ($FCX) experienced a slump. The copper price has since rebounded by 50% from $2 to $3 per pound.

Basic Materials

Communication Services

Communication Services

COVID-19 did not affect all entertainment companies. The concerts of Live Nation ($LYV), the Grands Prix of Formula One ($FWONA) and the theme parks of Disney ($DIS) were affected, whereas streaming services such as Netflix ($NFLX) and Spotify ($SPOT) and gaming thrived. The real estate service Zillow ($ZG) grew by triple digits in Q1 and is an outlier.

Time series of revenue in the entertainment industry.

Consumer Cyclical

The Consumer Cyclical sector saw some big shifts within and between industries in Q1 and Q2.

Consumer Cyclical

Some of the industries most impacted by COVID-19 were Casinos & Resorts – e.g. Las Vegas Sands ($LVS), Wynn Resorts ($WYNN), MGM Resorts ($MGM), Caesars Entertainment ($CZR) – Travel Services – e.g. Booking ($BKNG), Expedia ($EXPE), TripAdvisor ($TRIP) – Cruise Lines – e.g. Royal Caribbean ($RCL), Norwegian Cruise Line ($NCLH), Carnival ($CCL) – Hotels – e.g. Hilton ($HLT), Hyatt ($H), Marriott ($MAR).

Time series of revenue in the hotel industry.
Time series of revenue in the casino industry.

The internet retailer Overstock ($OSTK) experienced triple digit growth in Q2. Amazon ($AMZN) continued its growth trajectory in Q1 and Q2.

Time series of revenue among internet retailers.

The retailer Dick’s Sporting Goods ($DKS) is predominantly brick and mortar, but it saw triple digit online growth in Q2. Other retailers that saw growth in Q2 include Tractor Supply Company ($TSCO) and the home improvement retailers Lowe’s ($LOW) and Home Depot ($HD).

Residential Construction

Residential Construction such as Pulte Homes ($PHM) has done well in the previous two quarters, which is probably attributable to the low interest environment and the low mortgage rates. PennyMac Financial Services ($PFSI) and other mortgage finance companies also experienced growth in Q2.

Time series of revenue in residential construction.

Restaurants not doing deliveries lost revenue. Starbucks ($SBUX) and McDonald’s ($MCD) revenue fell by 38% and 30% respectively in the quarter ended June, whereas Domino’s Pizza ($DPZ) did much better with 16% growth in Q2.

Time series of revenue in the restaurant industry.
Auto and RV manufacturers

The auto manufacturer Tesla ($TSLA) experienced a halted revenue growth in Q2. The US, German and Japanese auto manufacturers such as Ford ($F), GM ($GM), Fiat Chrysler ($FCAU), Toyota ($7203.T), Volkswagen ($VOW.DE), Daimler ($DAI.DE) and BMW ($BMW.DE) have experienced a slump in Q2, which quickly manifested itself in railroad volumes, which are again returning to normal.

Time series of revenue for US and other auto manufacturers.

EV registrations in Europe were up 131% YoY in July, but Tesla unit sales imploded by 76% YoY in Europe in July.

Time series of Tesla automotive revenue per geographic segment.

RV manufacturers such as Winnebago ($WGO) and Thor Industries ($THO) did not see a contraction of revenue like the auto manufacturers.

Time series of revenue for recreational vehicles.

Consumer Defensive

In Consumer Defensive the bleach boom lifted sales at Clorox ($CLX). The companies Chegg and 2U operating in the industry Education & Training Services outpaced all other companies.

Consumer Defensive

Lockdowns of on-site premises have affected the breweries. Despite this the brewer Boston Beer ($SAM) saw its sales increasing in Q2 and not only due to the acquisition of Dogfish Head.

In retail grocery stores such as Kroger ($KR) and discount stores such as Walmart ($WMT) experienced growth in both Q1 and Q2. The discount store Dollar General ($DG) grew the fastest and experienced comparable sales growth of 21.5% in May, 17.9% in June and 17.2% in July.

Time series of revenue for grocery stores and discount stores.


The plunge in oil prices affected Oil & Gas that coincided with the outbreak of COVID-19 and the oil price war between Russia and Saudi Arabia. In Energy most Oil & Gas companies took a severe beating, when oil futures briefly went to single digits in mid April. Q2 revenue at Exxon Mobil and Chevron dropped by more than 50%. Exxon Mobil leaves the Dow Jones Industrial Average at the end of August. Exploration & Production and Refining & Marketing was in general more affected than Midstream and Equipment & Services.


Financial Services

Financial Services was a mixed bag. COVID-19 affected credit card companies such as Visa ($V), Mastercard ($MA) and American Express ($AXP). On the contrary PayPal ($PYPL) continued its growth trajectory. The increased trading had a positive effect on exchanges ($CBOE, $NDAQ, $ICE). Morgan Stanley ($MS) and Goldman Sachs ($GS) both experienced negative growth in Q1 but positive growth in Q2 as did the low cost broker Interactive Brokers ($IBKR) and JP Morgan ($JPM).

Financial Services

Increased commission fees drove the growth at Interactive Brokers.


In Healthcare the companies Moderna ($MRNA), Translate Bio ($TBIO), Novavax ($NVAX) doing COVID-19 vaccine research saw triple- and quadruple-digit growth in Q2 due to government grants and collaborations with big pharma and they have thus been excluded. Due to new collaborative agreements the outliers Assembly Biosciences ($ASMB) and ChemoCentryx ($CCXI) have also been excluded. Qiagen ($QGEN), which nixed their merger agreement with ThermoFisher ($TMO), experienced growth due to COVID-19 testing. No healthcare company experienced as much revenue growth in Q2 as Teladoc Health ($TDOC), which was already growing at a steady rate just like Dexcom ($DXCM) and Tandem Diabetes Care ($TNDM), which both operate in the diabetes field. Other fast growers are Twist Bioscience ($TWST), NovoCure ($NVCR), CareDx ($CDNA) and Veeva Systems ($VEEV).




Lots of industrial companies have been affected by COVID-19, but none as much as the airlines ($LUV, $AAL, $UAL, $DAL, $JBLU, etc.) and the aviation industry; e.g. Boeing ($BA), General Electric ($GE), Spirit AeroSystems ($SPR), etc.

Time series of revenue in the airline industry.

The railroads experienced a steep decline in traffic in Q2, but weekly volumes have recovered significantly since then.

Time series of revenue in the railroad industry.

Railroad revenue shrank due to auto volumes.

Time series of CSX revenue from products and services.

Real Estate

In Real Estate the Hotel & Motel REITs ($APLE, $HST, $RHP, $PK) have seen revenue declines of nearly 100% in Q2. The retail REITs have seen their revenue decline in Q2 due to some tenants being unwilling to pay the rent and others going bankrupt. The merger between the retail REITs Simon Property Group ($SPG) and Taubman Centers ($TCO) was cancelled.

Real Estate


In Technology Microsoft ($MSFT) was one of many software companies growing in Q1 and Q2. The semiconductor companies Intel ($INTC), KLA Corp ($KLAC), AMD ($AMD), Teradyne ($TER) all experienced positive revenue growth in Q1 and Q2 despite some of them having murky clouds ahead of them. The ride sharing services Uber ($UBER) and ($LYFT) saw their revenue plummeting in Q1 and Q2. Uber experienced less of a decline due to deliveries with Uber Eats.



In Utilities the water utilities ($AWK, $AWR, $CWT) have been less affected than the gas utilities.



More than 90% of all Russell 3000 companies have now reported a full quarter impacted by COVID-19; whether it’s from March to May – e.g. General Mills ($GIS) and Adobe ($ADBE) – April to June (i.e. most companies) or May to July – e.g. Walmart ($WMT) that reported on August 18th. Broadcom ($AVGO), Campbell Soup ($CPB) and Cooper Companies ($COO) will report for the fiscal quarter ended at the end of July on September 3rd. The figures will be updated accordingly.

The data is obviously backward looking, but data are available on a more current basis (e.g. weekly and monthly) for discount stores (e.g. Costco), railroads (e.g. reports from Association of American Railroads and Surface Transportation Board), auto manufacturers, etc.

Some companies such as industrials might have had large backlogs and will only have their revenue affected in upcoming quarters. It’s more relevant to look at guidance and outlook for the future in these cases.

Acquisitions and divestitures

The displayed growth is the non-organic GAAP growth. Significant acquisitions and divestitures within the past six quarters disqualified companies from inclusion. Some of these are Bristol-Myers ($BMY) acquiring Celgene ($CELG), AbbVie ($ABBV) acquiring Allergan ($AGN), Occidential ($OXY) acquiring Anadarko ($APC), FIS ($FIS) acquiring Worldpay ($WP), Fiserv ($FISV) acquiring First Data ($FDC), Wabtec $(WAB) acquiring GE Transportation, Transdigm ($TDG) acquiring Esterline ($ESL), Walt Disney ($DIS) acquiring 21st Century Fox by Disney, Truist ($TFC) after merger between BB&T ($BBT) and SunTrust Banks ($STI), ViacomCBS ($VIAC) after merger between Viacom and CBS. The gold miner Newmont Mining ($NEM) is excluded, because it acquired the Pe├▒asquito gold mine in Mexico from Goldcorp in April 2009. DowDuPont ($DWDP) spun of Corteva ($CTVA) and DuPont ($DD) in 2019 and was renamed Dow Chemical ($DOW) and neither of these companies are displayed. NortonLifeLock ($NLOK) sold Symantec to Broadcom. VF Corp ($VFC) divested Kantoor Brands ($KTB).

Shareholder dilution

Not all growth creates value and in some cases growth is actually negative when adjusted for shareholder dilution. The table below summarizes the shareholder dilution and revenue growth YoY for Q2.

Dilution (%)Growth (%)
YoY Q2 shareholder dilution and revenue growth.

Best selling and fastest growing drugs in the 2nd quarter of 2020

Best selling drugs

Once more Humira® from AbbVie is the best selling drug of the quarter ($4,837M) despite headwinds in Europe from biosimilars Amgevita®, Amsparity®, Halimatoz®, Hefiya®, Hulio®, Hyrimoz®, Idacio® and Imraldi®. In the US Humira® will in 2023 lose market exclusivity to the biosimilars Amjevita®, Cyltezo®, Hyrimoz®, Hadlima®, Abrilada® and Hulio®. AbbVie upon acquisition of Allergan has become less dependent on the patent expiration of Humira®.

Quarterly sales of Humira® by AbbVie.

Keytruda® from Merck continues to receive FDA approvals and could perhaps be the best selling drug in the world before the end of next year.

Quarterly sales of best selling drugs (USDm).

The best selling antidiabetic and antiviral drug is still the GLP1 receptor agonist Trulicity® (dulaglutide) from Eli Lilly and Biktarvy® from Gilead Sciences, respectively. The combined sales of the GLP1 receptor agonists Ozempic® (once weekly subcutaneous semaglutide) and Victoza® (once daily subcutaneous liraglutide) from Novo Nordisk however exceed that of Trulicity®.

Biktarvy® is currently the best selling oral drug ($1604M). In the future it could perhaps be the antidiabetic drug Rybelsus® (semaglutide) from Novo Nordisk. The antidiabetic drugs Januvia® and Janumet® from Merck reached combined annual peak sales of approximately $6B. The GLP1 receptor agonist semaglutide is a peptide, but it is available as a tablet (Rybelsus®) thanks to advances in oral peptide therapeutics.

Below the best selling drugs are visualized by company and by therapeutic area and vice versa.

Visualization of sales per drug in 2020Q2 grouped and colored by therapeutic area.
Visualization of sales per pharmaceutical company in 2020Q2 grouped and colored by therapeutic area.
Visualization of sales per drug in 2020Q2 grouped and colored by company.
Visualization of sales per therapeutic area in 2020Q2 grouped and colored by company.

Fastest growing drugs

The fastest growing drug value wise is the triple combination drug Trikafta®/Kaftrio® (ivacaftor+tezacaftor+elexacaftor) from Vertex Pharmaceuticals for the treatment of cystic fibrosis, which was approved by the FDA less than a year ago and by the EMA less than three months ago, followed by Keytruda® from Merck, Biktarvy® from Gilead Sciences, Dupixent® from Sanofi and Ozempic® from Novo Nordisk.

Quarterly sales of fastest growing drugs (USDm).

Ozempic® is the fastest growing drug percentage wise (~108%) followed by Venclexta® from AbbVie (~79%) and Dupixent® (~71%).

The details on semaglutide as a subcutaneous (Ozempic®) and oral (Rybelus®) antidiabetic drug and the clinical trials as an antiobesity drug are covered in different blog posts on Novo Nordisk.

Novo Nordisk grows GLP-1 market share in Q2 in the US with Ozempic® and Rybelsus®

Novo Nordisk has reported their 2nd quarter results.


For the 2nd quarter sales were DKKm 30,006 (-0%), gross profit was DKKm 25,234 and operating income was DKKm 13,838 (+3%).

In the US GLP1 for diabetes increased by 19%, whereas insulin decreased by 34%.

US sales by drug class.

CEO Lars Fruergaard J├Şrgensen

“The U.S. sales decline was driven by lower realized prices due to an unfavorable channel mix, rebate enhancements, the launch of additional affordability programs and changes in coverage gap legislation.”

Sales of Ozempic® increased in the US and EMEA, whereas sales of Levemir® and Victoza® decreased in the US.

World sales by drug.

Diabetes – GLP1s – Ozempic┬« and Victoza┬«

In the US once-weekly injected GLP-1 Ozempic® grew (93%) at the expense of once-daily Victoza® (-34%). In EMEA sales of Ozempic® increased by more than 200% to DKKm 604. Sales of Ozempic® were registered for the first time in China, where Victoza® currently has more than of 90% of the GLP-1 market share by value.


Insulins – Levemir┬« and Tresiba┬«

In the US the insulins Levemir® (-57%) and Tresiba® experienced negative growth of -57% and -37%, respectively. Sales of Levemir® decreased by approximately 20% in EMEA.


Diabetes – GLP1 – Rybelsus┬«

Rybelsus® (oral semaglutide) was approved for the treatment of adults with type 2 diabetes in the US on September 20th, 2019, in the EU on April 4th, 2020 and in Japan on June 29th, 2020. Sales have not yet exceeded $100M.

Obesity – GLP1 – Saxenda┬«

Novo Nordisk thanks to Saxenda® has a market share of 60.5% of the global obesity prescription drug market. Saxenda® was impacted by fewer patients initiating treatment due to COVID-19. New guidelines in Canada are the first to recognize obesity as a chronic illness, which if followed by the US and others could grow the market value significantly; a market which Novo Nordisk expects to at least double.

CEO Lars Fruergaard J├Şrgensen

Sales growth was negatively impacted by fewer patients initiating treatment due to COVID-19. Our strategic aspiration is to move to more than is to more than double sales in obesity by 2025. In support of that, Saxenda has been launched in 48 countries globally, and we continue to invest in market development activities.

Hemophilia – NovoSeven┬« and NovoEight┬«

The market share in hemophilia is mostly decreasing due to the growth of Hemlibra® from Roche rather than the decline of NovoSeven® and NovoEight®.

CEO Lars Fruergaard J├Şrgensen

For hemophilia, the declining sales of 1% were driven by lower NovoSeven sales, partly reflecting reduced elective surgeries and bleedings due to lockdowns, but partly offset by the continued global rollout of the new products, Refixia and Esperoct.


R&D milestones.

Obesity – Semaglutide

In May and June the weight loss results from the previously discussed STEP1, STEP2, STEP3 and STEP4 phase 3 trials on injected semaglutide for obesity were released. Injected semaglutide for obesity could happen in 2021. The SELECT trial (NCT03574597) regarding cardiovascular outcomes is estimated to be completed by 2023.

Weight loss results in STEP trials.

The SUSTAIN FORTE study (NCT03989232) compares the effect of two doses of semaglutide (1.0 mg and 2.0 mg) in people with type 2 diabetes (T2D) and results are expected in Q4.

CSO Mads Krogsgaard Thomsen

So I can say with the confidence that the SUSTAIN FORTE trial, in my mind, will show a very powerful lowering both of glucose and body weight.

Obesity – AM833 and AM833+semaglutide

On June 18th Novo Nordisk reported on the completion of the AM833 phase 2 trial and the AM833+semaglutide phase 1 trial. The weight loss with the peptide AM833 exceeds that of liraglutide. The weight loss with AM833+semaglutide exceeds that of semaglutide alone.

Novo Nordisk has discontinued trials on their co-agonist and tri-agonist.

Novo Nordisk CSO Mads Krogsgaard Thomsen

Regarding some other GLP-1-related clinical obesity projects we’ve been pursuing, namely, the coagonist and tri-agonist projects, we’ve decided to terminate both projects. This decision is based on the strong obesity data obtained for semaglutide and AM833 that, in aggregate, have raised the innovation bar for future Novo Nordisk obesity care and we’ve, therefore, prioritized our resources accordingly to achieve the best possible patient outcomes and product benefit risk profile.

This follows the discontinuation of the oral GLP-1 analogue OG2023SC in 2019Q3 because of better oral formulations of semaglutide. At Eli Lilly the dual GIP/GLP1 agonist Tirzepatide is in phase 3 (diabetes and obesity) and phase 2 (NASH). The phase 3 tirzepatide cardiovascular outcome study SURPASS-CVOT has been initiated.

Tirzepatide was mentioned on both the Novo Nordisk and Eli Lilly earnings calls.

Eli Lilly SVP Michael B. Mason

For tirzepatide, we’re glad to see that you were wowed by our type our Phase II data in for patients living with type two diabetes. I think the best thing really to do is to go back and take a look at the Phase II clinical studies. I mean we saw at the 15-milligram dose up to 2.4% A1c reduction and weight loss up to 12.7% versus placebo in just six months of study. So we’re excited to see how tirzepatide can perform in this patient population and longer studies in Phase III. There’s nothing to tell us that we won’t see exciting data coming out of the Phase III. We don’t have any new information that suggests otherwise. So we are incredibly confident about tirzepatide, not only in type two diabetes, but also we’re excited to see its potential in NASH and obesity. So our enthusiasm remains very, very high.

Novo Nordisk CSO Mads Krogsgaard Thomsen

Obviously, tirzepatide being a GLP-1/GIP agonist will, in my mind, based on data we’ve seen so far, unlike the combination of AM833 and sema, which is an amylin analogue and a GLP-1 analogue, there will probably be additivity of the GI side effect profiles of the GIP and the GLP-1 components. At least this is what we have seen both in a trial we’ve conducted ourselves years back with MAR709, our dual-agonist, but also so far in the trial in Phase II and the escalation trials that our colleagues at Eli Lilly have done. But we will see the data late this year and I guess during the course of next year.

Hemophilia A – Mim8 and gene editing

Growth hormone deficiency – Somapacitan

Novo Nordisk thanks to Norditropin® remains the leader in the human growth hormone disorder market with a value market share of 34.2%. Somapacitan has entered phase 3 (REAL4 and REAL5 trials).

Diabetes – Insulin Icodec

The phase 3 trial on once-weekly insulin icodec is expected to start before the end of the year. On June 14th Novo Nordisk reported that once-weekly insulin icodec showed comparable efficacy and safety to once-daily insulin glargine U100 in phase 2 trial.


On June 11th Novo Nordisk announced the $2.1B acquisition of Corvidia Therapeutics and their lead candidate ziltivekimab, which is a monocloncal antibody targeting IL-6 and reducing cardiovascular events.

This follows the agreements in Q4 of 2019 with Dicerna to discover and develop RNAi therapies for liver-related cardio-metabolic diseases and with bluebird bio to develop in vivo genome editing candidates for hemophilia and other severe genetic diseases.


Patent expiration dates
Future diabetes growth drivers.
US net sales and rebates.

Sector sizes of the S&P 500 over time

Dot-com bubble

The largest sectors and companies of the S&P 500 by market capitalization have changed over time. Prior to the dot-com bubble bursting in March 2000 the technology sector made up a third of the S&P 500 thanks to companies such as Microsoft, Cisco, Intel, Lucent Technologies, IBM, America Online and Oracle.

2007-2008 financial crisis

Leading up to the 2007-2008 financial crisis the most valuable sector was the financial sector and some of the most valuable companies were ExxonMobil, General Electric, Citigroup and AIG.

The two figures below show the composition of the S&P 500 at the peak of October 9th 2007 and the bottom on March 9th 2009.

Amazon was added to the S&P 500 on November 18th 2005. and Google was added on April 3rd 2006 after going public in August 2004. However, Berkshire Hathaway was not added until 2010 after a split into A and B shares, and Visa and Facebook did not go public until March 2008 and May 2012, respectively.

The Global Industry Classification Standard (GICS) was changed by MSCI and S&P in 2018. The Telecommunication Services sector was renamed to Communication Services and contains the two industry groups Telecommunication Services and Media & Entertainment. Alphabet and Facebook are two companies in this sector.

Peak on October 9th 2007.
Bottom on March 9th 2009.

2020 stock market crash

Approximately 200 net additions have been made to the S&P 500 since the 2007-2008 financial crisis.

Today (July 2020 following the 2020 crash) the top five (Apple, Microsoft, Amazon, Alphabet and Facebook) make up a quarter of the S&P 500, which is almost unprecedented. The technology sector is the largest and the healthcare sector in 2nd (J&J, UnitedHealth, Amgen, etc.) is larger than the financial sector in 3rd (Berkshire Hathaway, Visa, JP Morgan, etc.). The sectors Communication Services (Alphabet, Facebook, Comcast, Disney, Netflix, etc.) and Consumer Cyclical (Amazon, Home Depot, McDonald’s, etc.) are 4th and 5th. The energy sector is only the 10th largest sector following the 2020 oil price war and ExxonMobil is still the most valuable company in the sector.

The three figures below show the sector composition of the S&P 500 at the February 19th peak, the March 23rd bottom and today (July 10th).

Today July 10th.
March 23rd bottom.
February 19th peak.
Time series of the market capitalization of the S&P 500 and the top 5 components.

Companies that disappeared

Some companies that were in the S&P 500 before september 2008 have since disappeared not only from the index but entirely. Some merged, some went bankrupt, some were split up and some went private.

Chesapeake Energy ($CHK) filed for bankruptcy in June 2020. Diamond Offshore Drilling ($DO) filed for bankruptcy in April 2020. Frontier Communications ($FTR) filed for bankruptcy in April 2020. J. C. Penney ($JCP) filed for bankruptcy in May 2020.

Allergan ($AGN) was acquired by AbbVie ($ABBV) in May 2020. AbbVie itself was spun off from Abbott in 2013. United Technologies ($UTX) merged with Raytheon ($RTN) in april 2020 after spinning off Otis ($OTIS) and Carrier ($CARR). Spring Corporation ($S) merged with T-Mobile US ($TMUS) in April 2020.

AK Steel Holding ($AKS) was acquired by Cleveland-Cliffs Inc. ($CLF) in 2020. Altera ($ALTR) was acquired by Intel ($INTC). Fortune Brands was split up in 2011 and Beam ($BEAM) was acquired by Suntory in 2014. Compuware ($CPWR) was acquired by BMC Software in 2020. DELL ($DELL) Dell went public in 1988, private in 2013 and public again in 2018. Dow Chemical ($DOW) merged with DuPont (now $DD) in 2017 and was spun off from DowDuPoint ($DWDP) in 2019. Gannett ($GCI) in 2019 merged with New Media Investment Group, parent of GateHouse Media, which itself went bankrupt in 2013, and continued as Gannett. Ingersoll Rand ($IR) merged with Gardner-Denver in 2020 to form Trane Technologies. Jacobs Engineering Group changed its ticker from $JEC to $J in 2019. Life Technologies ($LIFE) was acquired by Thermo Fisher in 2014. Motorola Mobility ($MMI) was acquired by Google ($GOOG) in 2012. News Corp ($NWSA) spun off 21st Century Fox (FOXA) in 2013. BB&T acquired SunTrust ($STI) to form Truist Financial ($TFC). Sunoco ($SUN) was acquired by Energy Transfer Partners ($ETP) in 2012.

Novo Nordisk mostly unaffected by COVID-19 in Q1

Novo Nordisk is with the exception of the postponement of new clinical trials mostly unaffected by COVID-19. Sales in Q1 were however positively affected by stock piling of insulin. Growth continues to be spearheaded by Ozempic®, whereas Victoza® and Levemir® in the US continue to lead the decline. Rybelsus® revenue totaled DKKb 229 in the US in Q1. Rybelsus® was approved for the treatment of adults with type 2 diabetes in the EU on April 4th.

Novo Nordisk is experiencing positive GLP1R growth in the US due to Ozempic® and despite of Victoza®. Negative growth for insulin is led by Levemir®.


Novo Nordisk and Eli Lilly are both experiencing GLP1R growth in the US thanks to Ozempic® and Trulicity®, whereas Victoza® is declining.


Saxenda® for the treatment of obesity is also growing within and outside the US.

Eli Lilly has the dual GIP/GLP1 receptor agonist Tirzepatide (LY3298176) in phase 3 for diabetes (SURPASS) and obesity (SURMOUNT1 / NCT04184622), but it has gastrointestinal issues such as nausea, diarrhea and vomiting. The cardiovascular risk outcome trial (NCT04255433) is set to start this year.

Novo Nordisk has semaglutide for obesity in phase 3 (STEP). Results are expected in Q2 for STEP1 (NCT03548935), STEP2 (NCT03552757), STEP3 (NCT03611582) and STEP4 (NCT03548987) and later this year for STEP6 (NCT03811574). Results from the cardiovascular outcome trial SELECT (NCT03574597) is not expected until 2024.


Insulin is declining in the US led by Levemir® from Novo and Lantus® from Sanofi. Tresiba® (daily injection) is holding its ground in the US. Novo Nordisk has long acting Insulin Icodec (weekly injection / LAI287) in phase 2. The initiation of phase 3 could be affected by COVID-19.



Bloomberg – Novo Nordisk Joins Other Drugmakers With Gains on Virus Stockpiling

Reuters – Novo Nordisk’s drug sales boosted by virus-related stockpiling

Bloomberg – Novo Nordisk CEO on Earnings, 2020 Outlook, Coronavirus

Early Rybelsus® uptake further supports GLP-1 NBRx and TRx market leadership in the US

Novo Nordisk experiences growth among the GLP1R class of drugs, but this is offset by the decline of insulin in the US.

The diabetes world market as a whole across companies and across drugs is growing outside the US.

Growth of the sale of anti-diabetic drugs is experienced by Eli Lilly within and outside the US and by Novo Nordisk outside the US, whereas Merck, Sanofi and AstraZeneca are all declining in the US.

The GLP1R drug class (e.g. Ozempic® from Novo) is growing in the US, whereas insulin (e.g. Lantus® from Sanofi), DPP4 (e.g. Januvia® from Merck) and SGLT2 (e.g. Invokana® from J&J) are all declining in the US.