Amgen, a leading drugmaker, experienced a significant surge in stock prices following the release of positive initial data on its experimental weight loss injection. This development has raised concerns among investors about potential competition in the rapidly growing weight loss drug industry, resulting in a decline in shares for Novo Nordisk and Eli Lilly, which are currently prominent players in the obesity market.
Amgen’s CEO, Bob Bradway, expressed optimism during a first-quarter earnings call, stating that he was “very encouraged” by the early results from a mid-stage study on their obesity injection called MariTide. The drug has generated significant interest among investors, as it is expected to compete with other weight loss drugs in the market. Bradway highlighted the potential competitive advantages of MariTide, such as its less frequent administration compared to the weekly injections offered by Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.
Although Amgen did not provide specific data on MariTide, Chief Scientific Officer Jay Bradner assured that patient dropout has not been an issue. Amgen aims to release initial data from the study in late 2024 and is also planning late-stage studies on patients with obesity-related conditions and diabetes.
Analysts have shown increased confidence in Amgen’s weight loss drug pipeline, particularly regarding MariTide’s potential to differentiate itself from other therapies. William Blair analyst Matt Phipps upgraded the rating on Amgen shares to “outperform,” emphasizing the convenience offered by MariTide’s less frequent treatment intervals.
In addition to the positive news surrounding Amgen, Eli Lilly also provided reassurance to investors regarding ongoing supply constraints for its popular drugs. The company expressed optimism about increased production of Zepbound, its diabetes injection Mounjaro, and similar drugs for the rest of the year. Eli Lilly has multiple manufacturing sites either ramping up or under construction, signaling their commitment to meeting increased demand.
On the other hand, Novo Nordisk faced some challenges. Although sales of their weight loss injection Wegovy nearly doubled in the first quarter, they fell short of analysts’ expectations. Novo Nordisk attributed this underperformance to fierce competition from Eli Lilly’s Zepbound, which has impacted pricing dynamics for Wegovy in the U.S. The Chief Financial Officer of Novo Nordisk, Karsten Munk Knudsen, acknowledged that net pricing for both Wegovy and Ozempic would be lower throughout the year due to increasing volume and competition.
Overall, Amgen’s positive data on MariTide has prompted a surge in their stock prices, while Novo Nordisk and Eli Lilly experienced declines. The weight loss drug market is highly competitive, and investors are closely monitoring developments in this sector. As Amgen continues to make progress with MariTide and expand its manufacturing capabilities, the industry dynamics are likely to undergo significant changes in the coming years.
