Amgen Stock Slouches As Lilly Doubts Its Weight-Loss Approach

Amgen (AMGN) stock slouched Wednesday following a fourth-quarter beat as analysts’ zeroed in on the company’s experimental weight-loss drugs and a burgeoning battle with Eli Lilly (LLY).

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The biotech giant has two drugs in testing for obesity treatment and, early this week, unveiled the results of Phase 1 data for a drug called AMG 133, or MariTide. Though patients lost up to 14.5% of their body weight over 85 days, the regimen also led to high levels of nausea and vomiting.

Rival Eli Lilly questioned Amgen’s approach on its earnings conference call, William Blair analyst Matt Phipps said in a report. Weight-loss drugs from Lilly and Novo Nordisk (NVO) are known as agonists, which mimic the actions of a hormone. Amgen is using 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.

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

Leerink Partners analyst David Risinger says Amgen will have to deliver “compelling influence” on both weight loss and metabolic parameters like blood glucose in order to compete with Lilly and Novo. He isn’t sure Amgen’s drug is a viable competitor and downgraded Amgen stock to a market perform rating. The company will have Phase 2 results from its AMG 133 study in the fourth quarter of this year.

In morning trades on today’s stock market, Amgen stock slumped more than 3% to 304.15. Amgen stock is now extended from a buy point at 288.46 out of a cup base. Shares broke out in late December, according to MarketSmith.com.

Amgen Stock: Horizon Helps Sales Beat

Overall, Amgen beat December-ended quarter expectations, helped largely by its recent acquisition of Horizon Therapeutics. Sales surged 20% to $8.2 billion and narrowly topped forecasts for $8.13 billion, according to FactSet. But excluding the benefit of Horizon’s products, sales climbed a more modest 5%, said Phipps, the William Blair analyst.

He noted the fourth-quarter sales beat largely stemmed from Neulasta, Nplate and Prolia. Neulasta and Nplate help the body make white blood cells while undergoing cancer treatment. Prolia is an osteoporosis treatment. Neulasta sales rose more than 8% to $239 million, while Nplate sales tumbled almost 18% to $386 million. Prolia sales popped nearly 12% to $1.11 billion.

The company noted nine drugs hit record sales. The best growth came from Blincyto, which treats a form of leukemia. Blincyto sales rocketed 47% to $241 million. Evenity, a treatment for osteoporosis, brought in $318 million in sales. Sales surged 41% year over year.

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

For the year, the biotech giant expects to earn an adjusted $18.90 to $20.30 per share. The midpoint of that outlook, $19.60, fell short of Amgen stock analysts’ expectations for $19.96, according to FactSet. Amgen’s sales guidance, on the other hand, was narrowly above expectations for $32.71 billion. The biotech calls for $32.4 billion to $33.8 billion in sales this year.

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

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