Amgen’s stock surged by more than 12% on Friday following the release of positive initial data about its experimental weight loss injection.
This development raised concerns among investors about emerging competition in the rapidly expanding weight loss drug market, leading to declines in the shares of current players in the obesity drug sector, Novo Nordisk and Eli Lilly, on Friday.
Eli Lilly shares dropped nearly 3%, while Novo Nordisk’s U.S.-traded shares fell more than 1%.
Novo Nordisk’s stock had already come under pressure on Thursday after sales of its flagship weight loss injection, Wegovy, fell short of analysts’ estimates for the first quarter due to lower pricing.
During a first-quarter earnings call on Thursday, Amgen’s CEO Bob Bradway expressed optimism about the early results from a mid-stage study on the company’s obesity injection, MariTide.
Investors have been closely monitoring this drug and the rest of Amgen’s weight loss drug pipeline as it competes with several other drugmakers to enter the burgeoning market.
“We are confident in MariTide’s differentiated profile and believe it will address important unmet medical needs,” Bradway said during the call.
Although Amgen did not provide specific data, its Chief Scientific Officer Jay Bradner indicated that patient dropout rates were not a concern.
He mentioned that Amgen is on track to release initial data from the study in late 2024 and is also planning late-stage studies involving patients with obesity, obesity-related conditions, and diabetes.
Bradway also highlighted the potential competitive advantages of the injection, which patients could administer using a hand-held autoinjector once a month or even less frequently.
This could offer much greater convenience compared to the weekly injections currently available with Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.
“While there has been significant debate on the potential efficacy and safety of MariTide since the initial disclosures of the Phase I data in 2022.
William Blair analyst Matt Phipps said in a research note on Friday, announcing the firm’s upgrade of its rating on Amgen shares to “outperform.”
Wve have grown more confident in the potential for the therapy to meaningfully differentiate from other therapies in development, particularly in regard to treatment intervals,”
Amgen mentioned that it was abandoning its experimental oral obesity drug. However, analysts noted that this development was not as significant as the update on MariTide.
Amgen’s Bradway stated that the company has commenced expanding manufacturing for MariTide, signaling its readiness to produce an adequate supply of the drug, a significant issue Novo Nordisk and Eli Lilly have faced over the past year and a half.
On Tuesday, investors reacted positively to Eli Lilly’s assurance that it could overcome ongoing supply constraints for its popular drugs.
The company raised its full-year guidance, partly due to increased production of Zepbound, its diabetes injection Mounjaro, and similar drugs for the rest of the year.
Eli Lilly has numerous manufacturing sites either “ramping up or under construction,” including locations in North Carolina, Indiana, Ireland, and Germany, along with a recently acquired seventh site, as executives revealed during an earnings call.
Meanwhile, investors were less enthusiastic about Novo Nordisk on Thursday. Despite nearly doubling sales of Wegovy during the first quarter, the company fell short of analysts’ expectations, suggesting it is struggling to meet demand for the treatment.
Novo Nordisk attributed this to fierce competition from Eli Lilly’s Zepbound, which has impacted pricing dynamics for Wegovy in the U.S.
“Net pricing” for both Wegovy and Ozempic is expected to decrease in the U.S. throughout the year due to “increasing volume and competition,” stated Chief Financial Officer Karsten Munk Knudsen during a first-quarter earnings call on Thursday.
