Key Takeaways
- A Phase 2 study of Amgen’s experimental weight-loss treatment didn’t meet expectations of analysts.
- Concerns were also raised about the drug’s side effects and the number of patients who dropped out of the trial.
- The news sent shares of Amgen sinking.
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-à-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.
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