Amgen stock jumped Tuesday on a promising update for its potential rival to obesity treatments from Novo Nordisk and Eli Lilly.
Patients received injections of Amgen's drug monthly for three months. After 85 days, patients in the low-dose group lost 7.2% of their body weight, on average. Recipients of the high dose lost an average 14.5% body weight. In comparison, patients who received the placebo gained 1.5%.
The results could put Amgen in league with Eli Lilly and Novo Nordisk. Lilly has a diabetes drug it's testing as a potential treatment for obesity. Novo sells Wegovy, a weight-loss shot that's been in short supply recently, though the company says it's working to smooth over production issues.
RBC Capital Markets analyst Brian Abrahams says Amgen's drug could differentiate itself from the other obesity treatments, though there's room for multiple players. According to the Centers for Disease Control and Prevention, close to 42% of adults in the U.S. reported being obese from 2017-2020.
"With the successes and demand for obesity drugs currently on the market, the space is positioned for innovation and growth as the market looks to expand," Abrahams said in a note to clients.
On the stock market today, Amgen stock surged 5.6% to a new high at 292.39. Lilly stock rose a fraction to 366.66 and hit a fresh high. Novo shares dipped 0.2% to 114.85.
Amgen Stock: Differentiating From Its Rivals
All three obesity treatments activate a gut hormone called glucagon-like peptide-1, or GLP-1.
Amgen's drug also blocks another hormone tied to obesity, while Lilly's medicine activates a second hormone with ties to blood sugar control. Lilly's Mounjaro is approved for diabetes patients and is in testing for obesity treatment. Novo's Wegovy focuses on GLP-1, alone.
So far, recipients of Amgen's drug haven't shown a plateau in their weight loss. Weight loss has also been rapid and there have been no significant safety issues, Mizuho Securities analyst Salim Syed said in a note. All of these factors could "remain points of differentiation" for Amgen's obesity treatment.
He has a neutral rating and 208 price target on Amgen stock.
Amgen's drug is still in early-stage testing, well behind Novo's approved Wegovy and later-stage tests for Lilly's Mounjaro in obesity treatment. The midstage test for Amgen's drug is expected to begin next year, Syed said. Amgen is aiming to enroll several hundred patients with and without diabetes.
Comparing Obesity Treatments
In final-phase tests, patients who received Wegovy for 68 weeks lost almost 17% of their body weight, according to a recent analyst note. Lilly tested Mounjaro for 72 weeks. The highest dose led to a 22.5% average loss in body weight.
In comparison, Amgen patients lost 7.2%-14.5% body weight over about 12 weeks. At the same point in Lilly's study, weight loss was 8%, SVB Securities analyst David Risinger said in a note. But the dosing levels and frequency were different at that point.
He kept his market perform rating on Amgen stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
