Amgen stock neared its record high Friday after the company said it's "very encouraged" with midstage test results for its obesity treatment, MariTide.
The company is now planning multiple studies of MariTide in weight-loss and obesity-related diseases, including diabetes. If successful, Amgen will look to rival blockbuster weight-loss drugs from Novo Nordisk and Eli Lilly.
Mizuho Securities analyst Salim Syed says it appears investors are buying up Amgen stock ahead of the data, "giving credit in advance." Amgen doesn't expect to unveil the full results of its MariTide study in obesity treatment until later this year. He remains cautious, especially considering Novo and Lilly — the de facto leaders of the weight-loss drugs market — have struggled to meet demand.
But William Blair analyst Matt Phipps says if anyone can break into this space, it's Amgen.
"We see MariTide as having multi-blockbuster potential despite needing to penetrate the current duopoly with significant competition in clinical development, and we believe Amgen has the capacity and expertise to maximize development of the asset," he said in a report.
On the stock market today, Amgen stock soared 11.8% to 311.34. Shares are working their way toward their record high at 329.72, achieved on Feb. 5.
Amgen Stock: Looking To Rival Novo, Lilly
Like Novo Nordisk's Wegovy and Eli Lilly's Zepbound, Amgen's MariTide targets the GLP-1 hormone to improve feelings of satiety and blood glucose markers, as well as slow how fast the stomach empties itself. But rather than stimulate another hormone, like Zepbound which also loops in GIP, MariTide actually blocks a second hormone called GIPR.
Amgen says its drug has a differentiated profile. The company called out the handheld auto-injector which could lead to monthly — or even less — administration. This would differ from the weekly shots required by Wegovy and Zepbound.
Notably, patient dropout from the study "has not been an issue," Amgen executives said on the firm's conference call with analysts. This is key, says Piper Sandler analyst Christopher Raymond. In earlier testing, there were "meaningful discontinuations and tolerability issues at higher dose levels."
Now the discontinuations aren't a problem, Amgen says it's moving into multiple Phase 3 studies and is investing in manufacturing capacity for both clinical and commercial supply.
"A big statement obviously, but frustratingly, management provided little color at to HOW this agent appears differentiated from currently approved GLP-1s," he said.
Raymond reiterated his overweight rating and 344 price target on Amgen stock.
Amgen also said it completed a Phase 1 study of an oral drug, AMG 786, but won't develop it further. Management said AMG 786 didn't meet the bar for further development, especially compared to the injectable drug, MariTide, William Blair's Phipps said.
He has an outperform rating on Amgen stock.
Sales In Line, Earnings Beat
The MariTide update came during Amgen's first-quarter conference call. Amgen put up a "typically mixed" March quarter, though top- and bottom-line results came out ahead.
Overall, Amgen's sales climbed 22% to $7.45 billion, meeting analysts' forecast. Adjusted earnings slipped 1% to $3.96 per share, coming in above expectations for $3.88, according to FactSet.
Revenue from Amgen's biggest moneymaker, osteoporosis treatment Prolia, came in at $999 million, advancing 8% year over year. That narrowly beat projections for $998 million. Promisingly, sales of cholesterol treatment Repatha surged 33% to $517 million, crushing calls for $451 million.
The best growth came from Tezspire, Amgen's treatment for severe asthma. Sales skyrocketed 80% to $173 million. But that lagged Wall Street's projection for $189 million, according to FactSet.
Amgen narrowed its adjusted earnings outlook for the year and now expects $19 to $20.20 per share. The midpoint of the outlook topped analysts' forecast for $19.47. The company raised the low end of its sales outlook and now calls for $32.5 billion to $33.8 billion, vs. analysts' estimate of $32.97 billion.
Amgen stock was narrowly above its 50-day moving average at Thursday's close.
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