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Amgen Stock Sinks as Obesity Drug Test Results Fail To Meet Expectations
Key Takeaways
Amgen ( AMGN ) shares tanked Tuesday after results from a test of the biotech's experimental weight-loss drug came in below expectations.
The company reported a Phase 2 study of its injectable MariTide medicine showed an approximately 20% average weight loss over one year for patients who were obese or overweight without diabetes. In addition, Amgen noted the results were without a plateau, suggesting that even more pounds could be lost with additional use.
However, analysts were looking for better outcomes as compared with obesity treatments from Eli Lilly ( LLY ) and Novo Nordisk ( NVO ). They have also expressed worries about side effects and the number of patients that pulled out of the study. Citi wrote in a note that "concerns on pooled tolerability/discontinuation rates and overall competitiveness vis-Ã -vis Lilly or Novo has caused weakness in shares."
Jefferies analysts noted that expectations were for a 23% to 25% drop in weight. Still, they called the stock selloff was likely a "big overreaction" and an opportunity.
Amgen Chief Scientific Officer Dr. Jay Bradner explained that the results give the company confidence to initiate a Phase 3 study of MariTide. In addition, Amgen will be presenting the Phase 2 data "at a future medical congress and submitted for publication."
The news sent shares of Amgen down nearly 8% in recent trading to their lowest level since last spring.
