Welcome to issue #42 of The Davem Dish. Every week I share what actually works in investing based on my 20 years of wins, losses and expensive lessons. You’ll also get my thoughts on solopreneurship because the same principles apply — keep it simple, stay consistent and focus on what matters.
Remember the scene from The Karate Kid when Daniel’s knee gets wrecked by an illegal kick in the All Valley tournament and he’s crying in the locker room ready to quit? Mr. Miyagi rubs his hands together, presses them against the knee, and a few minutes later Daniel is back on the mat and wins the match against his nemesis Johnny Lawrence with the crane kick. If you’re an 80’s kid, of course you do. Along with many other classic scenes from The Karate Kid series.
Nobody thought about whether the injury was a torn ACL or another serious injury, or whether adrenaline carried Daniel through. It was Mr. Miyagi’s “magic cure”. That’s how our brains are wired: something happened, then something got better, so the first thing must have caused the second.
I think about this scene when my feed fills up with somebody promoting peptides. Somewhere between podcast clips and social media, a compound called BPC-157 became Mr. Miyagi’s hands in a vial. Inject it near a nagging shoulder or knee injury, and tomorrow you wake up pain free. Add TB-500 for recovery, a growth hormone peptide for sleep, a GLP-1 for weight loss, and you have the modern version of an instant cure.
Some of what’s being sold under the peptide label has transformed how doctors treat diabetes and obesity. Some have been tested on about thirty people. The interesting part, and what matters for your portfolio, is how easily the second category borrows credibility from the first, and how the same mental shortcut that sells an unproven peptide, also sells stocks.
Peptides Aren’t New
A peptide is just a short chain of amino acids, the same building blocks that make up proteins, and we’ve been using them as medicine for over a century. Insulin is a peptide. When doctors first gave it to a diabetic patient in 1922, it turned a death sentence into a manageable condition, and every insulin pen sold today descends from that work.
The drugs everyone is talking about now have a stranger origin. In the 1980s and ‘90s, researchers studying the venom of the Gila monster found a hormone that mimicked GLP-1, a gut peptide that tells your body to release insulin and signals your brain that you’re full. That discovery became exenatide, approved for type 2 diabetes in 2005. Liraglutide followed, then semaglutide, which Novo launched as Ozempic in 2017 and later as Wegovy for weight loss.
So the word “peptide” describes a molecule’s shape. It says nothing about whether the molecule works. Insulin and semaglutide are peptides with decades of trials behind them. BPC-157 is also a peptide. That doesn’t mean it’s a miracle drug.
The GLP-1 Boom
In 2024, about 3% of American adults were taking a GLP-1 for weight loss. Two years it’s 11%, roughly one in nine adults. Very few products in any industry catch on that fast.
The science holds up, too. These drugs work by suppressing appetite, and each new generation hits more of the body’s hunger signals at once. The first generation (Ozempic and Wegovy) produces about 15% weight loss. The second (Mounjaro and Zepbound) gets past 20%. Eli Lilly’s next one, retatrutide, has patients losing around 25% of their body weight in trials, with some reaching 30%. It isn’t approved yet, and Lilly is expected to file in early 2027.
The money has followed. Lilly now holds about 61% of the U.S. GLP-1 market against Novo’s 39% and both companies now sell a once-a-day pill, which should widen the market even further.
If you’re looking for a trend, this is about as validated as healthcare gets. Hold onto that, because the rest of the peptide market is going to try very hard to make you believe it belongs in the same conversation.
Facts vs. Myths
“Peptides work.” This is the root of everything else. GLP-1s proved that some peptides produce dramatic, measurable results in tens of thousands of trial patients, and the public generalized that to the whole category. Certain peptides working for weight loss doesn’t mean everything called a peptide works for everything. The name travels a lot faster than the data.
“BPC-157 heals injuries.” Impressive results come from rats and rabbits. The entire human evidence base is roughly thirty people across three small pilot studies, none of which compared the peptide against a placebo. That matters because most injuries get better on their own. If you inject BPC-157 into a sore shoulder and it feels better tomorrow, the peptide gets the credit, exactly like Mr. Miyagi’s hands.
There are also plenty of stories of dog owners injecting BPC-157 into their pets at home, often paired with TB-500 in a blend nicknamed “Wolverine,” which is a popular stack among people too. Search interest in BPC-157 for dogs has more than doubled in the past year and there are even canine-branded formulations. The reasoning is something like if the compound has worked on rats and rabbits, a dog is just another animal and it should work there too. Social media fills up with glowing testimonials from owners who say nothing else helped. Veterinarians are more cautious, pointing out that there are no controlled trials in dogs, and that a compound that promotes blood vessel growth could, in theory, also speed up a tumor nobody has found yet.
My dog occasionally comes up limping on her right hind leg, and almost every time she’s back to normal by the next morning. If I’d injected her with BPC-157 the night before, I’d have watched her take a lap at the dog park the next day and been completely convinced. Odds are she would have been fine anyway, and I’d have no way of knowing if the BPC-157 worked or I wasted money on a scam.
“If it makes sense, it probably works.” BPC-157 has a plausible sounding explanation, encouraging blood vessel growth in damaged tissue, and that plausibility is doing the work the evidence hasn’t. Anti-aging peptides like epitalon follow a familiar arc: impressive in flies and mice, promising in other animals, and essentially nothing in humans. Its human evidence is two papers from a single Russian research group, never replicated.
“The FDA is approving peptides.” When I first read the FDA was considering approval of BPC-157, I assumed what most people probably assume: a drug was being approved. Some company had run the trials, the agency had reviewed the results, and a specific product with a specific owner was about to hit the market. That turned out to be wrong.
What actually happened was back in 2023, the FDA banned pharmacies from making BPC-157 and a handful of other peptides over safety concerns. This summer, after RFK Jr. pushed to reverse that, a FDA panel narrowly voted to let pharmacies make it again, over the objections of its own scientists, who couldn’t even agree on exactly what the compound is. Several of the panelists who voted yes work for clinics that sell peptides. Even then, the vote was only a recommendation, and the FDA still hasn’t acted on it.
If it does go through, what will change is that a licensed compounding pharmacy could mix BPC-157 for a specific patient with a prescription. That’s a step up from a vial bought online, because those pharmacies have to meet sterility and handling standards and answer to state pharmacy boards. But nobody would have proven that BPC-157 works. No company would have run a clinical trial. And nobody would own it.
This is where the investing angle comes in. A drug that goes through full FDA approval comes with patents and years of exclusivity, which is how Lilly can charge what it charges for Zepbound. A compound that any licensed pharmacy can mix has no owner, which means no moat. Whatever profit exists flows to whoever can acquire customers most cheaply, namely telehealth platforms and cash-pay clinics, and a competitor can copy the offer the next morning. On top of that, the whole business rests on a regulatory decision that a future administration could reverse, which is exactly what happened to compounded GLP-1s once the shortage ended.
The scale also matters. One Wall Street estimate puts the entire wellness-peptide market at about $2.2 billion. Lilly sold nearly $15 billion of Mounjaro and Zepbound in a single quarter.
If this sounds familiar, it should. It’s the supplement aisle with a syringe. Americans spend more than $60 billion a year on supplements, and since 1994 those products haven’t needed FDA approval before going on sale, which means nobody has to prove they work. Plenty of them probably don’t, and the industry has done just fine, because when you can’t compete on results, the money goes to whoever markets best and reaches the most customers. A pharmacy made BPC-157 would follow the same playbook with a prescription attached: a product nobody owns, sold on testimonials, where the winner is the company with the biggest ad budget.
Same Pattern, Different Wallet
So how did the market react to a non-binding vote on a compound nobody owns?
Hims & Hers, the public telehealth company analysts most often tie to compounded peptides, rose as much as 13% on the day of the vote before giving most of it back by the close. Back in April, the stock had already jumped 13% on news that the FDA would simply schedule the meeting. Analysts rushed out price targets anyway, even though the vote was only a recommendation, the FDA’s own staff had argued against it, and the panel reviewed BPC-157 for ulcerative colitis, which is not why most people buy it.
The other side of the same coin is Viking Therapeutics, a clinical-stage company developing its own GLP-1 drug. In August 2025, Viking reported results for its pill version. The drug met its goals and produced weight loss, but too many patients quit because of nausea and vomiting, and the stock fell 42% in a single day. The science largely worked, and shareholders still lost close to half their money overnight.
Small biotechs and telehealth companies with no moat have always been risky, so it would be easy to read all of this and to conclude that the answer is to skip the hype and buy the proven names. But then you have to consider the company that started the trend.
Novo invented the modern GLP-1 market. Ozempic and Wegovy worked exactly as promised, the trials held up, and demand outran supply for years. If you had predicted in 2021 that semaglutide would become a blockbuster that changed obesity treatment, you would have been right. The stock more than doubled from late 2022 into 2024, peaking at $140. And yet Novo’s stock has fallen more than 70% from that peak, trading now at around $37.
Nothing went wrong with the medicine, but the supply shortages and planning missteps cost the company their first-mover advantage. Lilly showed up with a drug that produced more weight loss and took the lead in the U.S. despite launching later. Pharmacies sold cheap copies during the shortage, and at one point Novo estimated more than a million Americans were using them. Semaglutide’s patent expired in markets like India and Canada, generics arrived, and Novo cut prices by up to 48% in India. Starting in January, it will cut the U.S. list price of Wegovy roughly in half. Along the way the company has shed about 13,000 jobs.
Being right about the trend tells you where to look. It doesn’t tell you which company will “win”, what price is reasonable to pay, or when to get out.
Running the Process
The job then is to find companies that participate in the trend and run each one through the same screens I would run anything else: the financial quality of the business, valuation, operating history, margin trajectory, and capital allocation.
Here’s the candidate universe. None are recommendations, just names worth evaluating.
Big Pharma: Eli Lilly, Novo, Amgen, Pfizer
Clinical Stage Biotech: Viking Therapeutics, Structure Therapeutics, Zealand Pharma
Peptide Manufacturing: Bachem, PolyPeptide
Telehealth and Compounding: Hims & Hers, LifeMD
Most of these fell out quickly. The biotechs don’t have the revenue or earnings to screen at all, so buying one is really a bet on the next trial result. The rest struggle with some mix of slow or uneven growth, choppy earnings and thin or no free cash flow, and Hims adds heavy short interest on top of deteriorating results. PolyPeptide is being acquired by Samsung Biologics, which takes it off the table. Novo did pass the screens until late last year, when its financial results started to slide alongside the stock price.
That leaves Lilly as the only name that passes and it’s been on my watchlist for years. I don’t own it right now, but a pullback of 15% or more, down to a support level, is where I’d start looking to buy again. That pattern has worked more than once over the past two years, and as long as the financial results stay strong, I’d expect it to keep working.
The Real Miyagi Method
What’s funny about the locker room scene is that the hand trick is the one shortcut Mr. Miyagi offers. Everything else he teaches Daniel is slow, repetitive, and looks pointless while it’s happening — “wax on, wax off”, “sand the floor”, “paint the fence”. The miracle cure gets remembered, but the boring repetition is what got Daniel into the tournament in the first place.
Investing works the same way. The peptide craze will keep producing miracle stories, some about drugs that really work and many about compounds that have never been properly tested, and probably don’t work. The trend tells you where to look. The fundamentals tell you whether a business deserves your money, the price tells you when, and a predetermined exit tells you what to do if you’re wrong. None of it is exciting, which is exactly why it holds up when the hype doesn’t.
Cheers,
Andrew
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The content provided are personal opinions and presented for educational purposes only, as of the date published or indicated. Davem Advisors LLC is not a bank, licensed securities dealer, broker or investment advisor. Displayed returns are unaudited. Nothing stated constitutes a recommendation or advice as to whether any investment is suitable for a particular investor. You alone are solely responsible for determining whether any investment, strategy or service is appropriate for your objectives. Past performance is no guarantee of future results. Inherent in any investment is the risk of loss.