Amgen’s stock surged by over 12% after teasing positive initial data on its experimental weight loss injection, MariTide. This news has caused investor concerns about potential new competition in the rapidly growing weight loss drug industry. As a result, shares of the current industry players, Novo Nordisk and Eli Lilly, saw a decline on Friday. Novo Nordisk’s U.S.-traded shares fell more than 1%, while Eli Lilly shares dropped nearly 3%.
Confidence in MariTide’s Differentiated Profile
During a first-quarter earnings call, Amgen’s CEO Bob Bradway expressed his encouragement by the early results from a mid-stage study on MariTide. Investors have been closely following this drug and the remainder of Amgen’s weight loss drug pipeline as the company competes with other drugmakers in this lucrative market. Bradway emphasized the potential competitive advantages of MariTide, highlighting its convenient dosing schedule compared to existing options on the market.
Encouraging Manufacturing Expansion Signals
Amgen’s decision to expand manufacturing for MariTide is a positive signal to investors that the company is gearing up to meet the potential demand for the drug. This move addresses a major issue that Novo Nordisk and Eli Lilly have struggled with in the past year and a half. It demonstrates that Amgen is serious about bringing MariTide to market and providing a consistent supply to meet patient needs.
Concerns with Novo Nordisk’s Struggle
While Novo Nordisk saw sales of Wegovy nearly double in the first quarter, they fell short of analysts’ expectations. This indicates that the company may be facing challenges in meeting the demand for their treatment. Additionally, intense competition from Eli Lilly’s Zepbound has impacted pricing dynamics for Wegovy in the U.S. The Chief Financial Officer of Novo Nordisk mentioned that “net pricing” for both Wegovy and Ozempic will be lower throughout the year due to increasing volume and competition.
Conversely, Eli Lilly assured investors that they can overcome ongoing supply constraints for their popular drugs, including Zepbound and Mounjaro. The company raised its full-year guidance, expressing optimism about increased production of these drugs for the remainder of the year. With several manufacturing sites in various locations, Eli Lilly is positioning itself to meet the growing demand for its diabetes and weight loss injections.
Following the positive news from Amgen, William Blair analyst Matt Phipps upgraded the rating on Amgen shares to “outperform.” He expressed confidence in the differentiated profile of MariTide and its potential to address unmet medical needs. However, Jefferies analyst Michael Yee highlighted the importance of the MariTide update over the scrapping of Amgen’s experimental oral obesity drug.
The introduction of Amgen’s new weight loss injection, MariTide, has significantly impacted the obesity drug market. With positive initial data and promising manufacturing expansion signals, Amgen is poised to become a key player in the industry. Conversely, Novo Nordisk is facing challenges in meeting demand and pricing pressures from competitors like Eli Lilly. The competition in this market is fierce, with each company vying for a larger share of this rapidly growing sector. Investors will continue to monitor these developments closely as the landscape of the weight loss drug market evolves.
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