Amgen stock surged Tuesday on a reportedly bullish call for its experimental obesity treatment — a potential rival to drugs from Novo Nordisk and Eli Lilly.
In one report, a Morgan Stanley analyst said Amgen could have a multibillion-dollar drug on its hands with AMG133. The drug blocks a hormone and a protein involved in blood sugar control and differs from other approved and experimental obesity treatments.
Morgan Stanley analyst Mark Purcell, in a separate report, said the medical world now classifies obesity as a chronic disease rather than a consequence of lifestyle choices.
"We believe the treatment of obesity is on the cusp of moving into mainstream primary care management," he said.
On today's stock market, Amgen stock jumped 5.7% to 245.44. Lilly stock rose 1.2% to 327.60. Novo stock advanced 0.5% to 104.39.
Amgen Stock: A New Mechanism In Obesity Treatment
Investors are closely watching the battle in obesity. Novo Nordisk sells Wegovy, a shot that treats obesity by targeting the glucagon-like peptide receptor, or GLP-1. This is also a target for numerous diabetes drugs.
Meanwhile, Lilly is testing its recently approved diabetes medicine, Mounjaro, in patients with obesity. Mounjaro targets both GLP-1 and glucose-dependent insulinotropic polypeptide, or GIP. Both are hormones tied to blood sugar control.
Amgen's AMG133 differs slightly, Morgan Stanley analyst Matthew Harrison reportedly said in his coverage of Amgen stock. Like Wegovy and Mounjaro, it targets GLP-1. But it also loops in the gastric inhibitory polypeptide receptor, or GIPR, a gut protein involved in digestion.
The market for obesity treatments could be huge. Morgan Stanley suggests it could be a top-12 therapeutic category. Today, it's worth $2.4 billion. But it could grow to $54 billion by 2030. That puts Amgen and Lilly in a good position. Novo's Wegovy is currently experiencing shortages.
"The clear precedent for investors is treatment for high blood pressure, which went from a nascent category in the 1980s to a $30 billion market in the 1990s," Purcell said.
Investor's Business Daily requested — but hasn't received — the report that specifically details Amgen stock and the company's chances with AMG133. This year, the company said the experimental treatment led to 5%-10% weight loss over more than 10 weeks in patients with obesity.
Shares Touch A Two-Month High On Bullish Call
The jump Tuesday pushed Amgen stock, briefly, to a two-month high. Shares also overtook their 50-day moving average, according to MarketSmith.com.
Shares have a strong Composite Rating of 91. This puts Amgen stock in the top 9% of all stocks in terms of fundamental and technical performance, IBD Digital shows.
Amgen representatives didn't immediately respond to a request for comment.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
