Amgen Stock Slouches As Lilly Doubts Weight-Loss Approach

Amgen Stock Slouches As Lilly Doubts Weight-Loss Approach

Amgen ( AMGN ) shares fell on Wednesday after a fourth-quarter defeat after analysts zeroed in on the company’s experimental weight-loss drug and continued to struggle to lose weight. Eli Lilly (LLY).




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The biotech giant has two drugs it’s testing to treat obesity, and earlier this week released Phase 1 data results for a drug called AMG 133, or MariTide. Although patients lost 14.5% of their body weight over 85 days, the regimen resulted in high levels of nausea and vomiting.

Rival Eli Lilly questioned Amgen’s approach to the earnings conference call, William Blair analyst Matt Phipps said in a report. Slimming drugs from Lilly and New Nordisk (NVO) are known as agonists that mimic the actions of a hormone. Amgen uses an antagonist that blocks a hormone. Lilly’s tirzepatide and Amgen’s MariTide both act on the GIP receptor. Lilly’s drug also targets the GPR-1 receptor.

“Antagonism of GIPR, as with AMG 133, could potentially be less tolerable given the high doses needed to antagonize GIPR,” Lilly noted in its earnings call, Phipps said. “When asked about this, Amgen management reiterated its belief in GIPR antagonism given the totality of the evidence.”

David Risinger, an analyst at Leerink Partners, said Amgen will have to make a “compelling impact” on both weight loss and metabolic parameters such as blood glucose to compete with Lilly and Novo. He is not convinced that Amgen’s drug is a viable competitor and has downgraded Amgen’s stock to a market perform rating. The company will receive Phase 2 results from its AMG 133 study in the fourth quarter of this year.

Amgen shares fell more than 3% to 304.15 in morning trading today. Amgen shares are now extended from a buy point at 288.46, a cup base. According to MarketSmith.com, the stock came out in late December.

Amgen Foundation: Helping Horizon Sales Succeed

Overall, Amgen beat expectations for the quarter ended in December, largely due to its recent acquisition of Horizon Therapeutics. Sales rose 20% to $8.2 billion, narrowly beating estimates of $8.13 billion, according to FactSet. But excluding the benefit of Horizon products, sales rose a more modest 5%, said Phipps, William Blair analyst.

It noted that sales growth in the fourth quarter was mainly driven by Neulasta, Nplate and Prolia. Neulasta and Nplate help the body make white blood cells during cancer treatment. Prolia is a treatment for osteoporosis. Neulasta sales increased more than 8% to $239 million, while Nplate sales fell almost 18% to $386 million. Prolia’s sales rose nearly 12% to $1.11 billion.

The company noted that sales of nine drugs reached record levels. The best growth came from Blincyto, which treats a form of leukemia. Blincyto sales increased 47% to $241 million. Evenity, an osteoporosis treatment, brought in $318 million in sales. Sales increased by 41% year-on-year.

But Amgen’s biggest drug, Enbrel, saw sales drop 8% to $1.02 billion.

For the year, the biotech giant expects to post adjusted earnings of $18.90 to $20.30 per share. That forecast’s midpoint of $19.60 missed Amgen stock analysts’ expectations of $19.96, according to FactSet. Amgen’s sales guidance slightly beat expectations of $32.71 billion. The biotech expects sales of $32.4 billion to $33.8 billion this year.

Follow Allison Gatlin on X, formerly known as Twitter @IBD_AGatlin.

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