Amgen's obesity treatment, MariTide, continues to dominate the conversation, an analyst said Wednesday as Amgen stock slipped on its mixed second-quarter report.
The company recently announced "encouraging" interim data for MariTide, a potential competitor to Novo Nordisk's Wegovy and Eli Lilly's Zepbound. The market for weight-loss drugs is huge. Wegovy sales rocketed 69% to $1.88 billion in the second quarter. Lilly's Zepbound is expected to bring in $927 million in June-quarter sales.
Amgen wants a piece of that, and the company is doubling down on its efforts in obesity treatment. Its drug uses a different mechanism to tackle obesity. Later this year, Amgen expects to unveil the results of a yearlong study of MariTide in obesity treatment. The company is also planning to run a study of its drug in patients with type 2 diabetes with and without obesity.
"What differentiates Amgen from earlier-stage obesity developers is the company's capacity and resources to execute on broad Phase 2 and Phase 3 development of MariTide in obesity and obesity-related conditions," RBC Capital Markets analyst Gregory Renza said in a report.
He has an outperform rating on Amgen stock and raised his price target to 362 from 332, noting the catalyst setup for late 2024 remains strong.
Amgen Stock: Sales Skyrocket
But on today's stock market, Amgen stock slipped 5.1% to 312.34. Shares undercut their buy zone and buy point at 322.60. Amgen stock broke out of a cup-with-handle base on June 25, according to MarketSurge. Shares skidded below their 50-day line on Wednesday.
Sales rocketed 20% to $8.39 billion, coming in above expectations for $8.35 billion, according to FactSet. But adjusted earnings missed forecasts at $4.97 a share. Analysts' expectations ranged from $4.98 to $5.07, RBC Capital Markets analyst Gregory Renza said in a client note.
Renza noted second-quarter outperformers included Amgen's biggest moneymaker, Prolia. Sales of the osteoporosis treatment jumped 13% to $1.17 billion, beating expectations for $1.09 billion to $1.11 billion, Renza said.
Notably, sales of products Amgen acquired alongside Horizon Pharma were mixed. Revenue from Tepezza, its thyroid eye disease treatment, missed forecasts at $479 million. But sales of gout treatment Krystexxa beat projections at $294 million.
Amgen raised the low end of its sales outlook and now expects $32.8 billion to $33.8 billion. At the midpoint, that topped analysts' call for $33.07 billion. The company also narrowed its profit guidance by 10 cents on either side to $19.10 to $20.10 a share. Amgen stock analysts projected $19.50.
Focus Remains On Obesity Treatment
But all eyes are on obesity treatment.
Amgen now expects its research and development expenses this year to increase by more than 25% vs. last year. Its focus is on developing key clinical assets, including MariTide, an eczema drug known by the test name rocatinlimab and drugs it acquired from Horizon, William Blair analyst Matt Phipps said.
But Amgen managers are playing it close to the chest with MariTide, he said in a report.
"No real new tidbits were provided on the ongoing Phase 2 trial of MariTide, but management reiterated the potential differentiation of a single-use pen format with once-monthly injections," he said.
Phipps maintained his outperform rating on Amgen stock.
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