Amgen (AMGN) signaled it intends to become the third powerhouse developer in the booming weight loss drug segment on Thursday, as two of its top executives delivered positive comments about the progress of its obesity candidate Maridebart Cafraglutide (MariTide, formerly AMG 133)—comments that propelled Amgen shares to their biggest gain in 15 years Friday.
Addressing analysts on his company’s quarterly earnings call following the release of first-quarter results, chairman and CEO Robert A. Bradway said Amgen was “very encouraged with the results” gleaned from an interim analysis of data from a Phase II trial (NCT05669599) comparing participant responses to three selected doses of MariTide with responses to placebo.
Encouraged enough, Bradway said, to begin planning for a Phase III trial—and to shift its strategy in weight loss drug development by halting the development of a small molecule oral obesity candidate, AMG 786, in favor of MariTide, a gastric inhibitory polypeptide receptor (GIPR) antagonist and glucagon-like peptide 1 (GLP-1) receptor agonist delivered via injection. Amgen said it has completed its Phase I trial (NCT05406115) of AMG 786, a single and multiple ascending dose study in healthy and obese participants.
“Given the profile we’ve seen with AMG 786, we will not pursue further development. Instead, in obesity, we’re differentially investing in MariTide and a number of preclinical assets,” James “Jay” Bradner, MD, Amgen’s executive vice president, research and development, and CSO, told analysts.
As for the Phase II trial, Bradner added: “The results to date are satisfactory, and all study arms remain active without patient dropout issues.”
Bradway added that Amgen was prepared for clinical and commercial scale-up of MariTide, since the drug is based on an antibody backbone, and the process of manufacturing it aligns with Amgen’s expertise in biotherapeutic manufacturing. The company expects MariTide to allow for monthly, or even less frequent, dosing.
No topline data
Bradner and Bradway didn’t offer any topline data to back up their gloom on AMG 786 or their optimism about MariTide, saying that will come later this year.
However, most analysts deemed the executives’ comments enough to conclude that Amgen could indeed significantly weigh into—indeed, disrupt—a specialty that until now has been dominated by Novo Nordisk (NOVOB) and Eli Lilly (LLY), with a smaller competitor Viking Therapeutics (VKTX) also looming.
Investors agreed with that assessment, as Amgen shares jumped 15% a minute after the start of trading Friday, from $278.39 to $320.31, before ending the day at $311.34 and settling for a 12% gain. It was Amgen’s biggest one-day advance since rising 13.9% on July 8, 2009, when denosumab (now marketed as Prolia®) outperformed Novartis (NVO)’s Zometa® (zoledronic acid) in a Phase III trial.
“All of this commentary sounds fine but, absent actual data, we don’t find it to be the significant catalyst implied by the market move, particularly as we see a significant part of Amgen’s valuation already driven by MariTide,” cautioned Brian P. Skorney, a senior research analyst with Baird, in a research note Friday. “We continue to think there is room for disappointment when we get the full Phase [II] data set at the end of the year given the data nuances from the Phase [I] publication.”
However, Jefferies equity analyst Michael J. Yee took a more optimistic approach, defending Bradway and Bradner’s comments and going as far as predicting MariTide could be a multi-billion-dollar weight loss blockbuster drug.
$5–10 billion forecast
“Interim analysis commentary should allay fears and probably take the worst-case scenarios off the table—which makes this easier to own and more de-risked at this point,” Yee wrote Thursday in a research note. “While we appreciate there is still plenty of work ahead (full Phase II data, starting Phase III, etc.) the reality is AMGN probably has a ‘monthly’ drug on their hands and can be a $5–10B+ player in the future. This should drive a re-rating of the stock as it remains very under-owned across the Street.”
By contrast to Amgen, its two largest rivals in the weight loss space saw stock losses, albeit small ones. Novo Nordisk shares on Nasdaq Copenhagen fell nearly 3%, from DKK 873.10 ($126.03) to DKK 850.60 ($122.78), while Lilly shares on the New York Stock Exchange dipped 3%, from $755.91 to $734.97. Bucking the trend was Viking, whose shares on Nasdaq inched up nearly 2% from $75.76 to $76.97.
Amgen’s sweet talk about MariTide comes as it continues a Phase II trial designed to assess how well the drug helps induce and maintain weight loss from baseline at Week 52 in overweight or obese participants with and without type 2 diabetes. In February, a team of Amgen researchers published in Nature Metabolism positive data from a Phase I study (NCT04478708) showing that participants taking multiple ascending doses of MariTide maintained weight loss for up to 150 days after their last dose.
Matt Phipps, PhD, a biotechnology analyst with William Blair, anticipates the Phase II trial of MariTide will show results at least as positive, if not more so, over a longer treatment duration than the five-month interval evaluated in the 110-patient Phase I study. Based on that anticipation, he upgraded William Blair’s rating of Amgen stock from “Market Perform” to “Outperform.”
“We have grown more confident in the potential for the therapy to meaningfully differentiate from other therapies in development, particularly in regard to treatment intervals,” Phipps wrote Friday in a research note.
Joining Phipps in upgrading Amgen shares at deadline was Barclays analyst Carter Gould, who elevated his firm’s rating on the stock from “Underweight” to “Equal Weight.”
And while Gregory Renza of RBC Capital Markets lowered his firm’s 12-month price target on Amgen shares 1% from $332 to $328, he kept RBC’s “Outperform” rating. By contrast, three analysts at deadline raised their price targets on Amgen shares, including:
- Terence Flynn (Morgan Stanley)—Up 14%, from $271 to $310, and maintaining an “Equal-Weight” rating.
- Colin Bristow (UBS)—Up 8%, from $284 to $307, and maintaining a “Neutral” rating.
- Evan David Seigerman (BMO Capital)—Up 6%, from $336 to $355, and maintaining an “Outperform” rating.
“Multi-blockbuster potential”
Phipps added: “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.”
The duopoly Phipps refers to is Novo Nordisk and Lilly. Novo Nordisk commands the largest sales through its blockbuster adult type 2 diabetes drug Ozempic® (semaglutide), which shares the same active ingredient as its obesity drug Wegovy® (semaglutide injection).
On Thursday, Novo Nordisk reported first-quarter results showing Ozempic sales leaping 42% year-over-year during Q1, from DKK 19.640 billion ($2.834 billion) to DKK 27.810 billion ($4.013 billion). Wegovy sales more than doubled, soaring 106% from DKK 4.563 billion ($658.485 million) to DKK 9.377 billion ($1.353 billion). The two drugs underpinned a solid 28% jump in net profit, from DKK 19.814 billion ($2.859 billion) to DKK 25.407 billion ($3.667 billion), on net sales that rose 22% from DKK 53.367 billion ($7.701 billion) to DKK 65.349 billion ($9.431 billion).
Novo Nordisk raised its 2024 guidance to investors with one percentage point increases in both its projected range of sales growth (from 18–26% to 19–27% at constant exchange rates or CER), as well as operating profit growth (from 21–29% to 22–30%, also at CER).
“While we continue to see Novo as a wide-moat firm, with strong intangible assets surrounding its cardiometabolic business, we think high obesity drug demand and a scarcity of supply have driven share prices above their intrinsic value,” Karen Andersen, who follows the biotech market as a strategist for Morningstar Research Service, wrote Thursday.
“We assume Novo can grow GLP-1 sales across indications from roughly $24 billion in 2023 to nearly $75 billion by 2031, before the patent expiration for semaglutide,” Andersen observed, before adding: “We think current share prices do not properly account for expected price declines and competition, let alone the risk of patients discontinuing therapy due to tolerability, cost, or long-term safety issues.”
Novo Nordisk has sought to address demand by stepping up manufacturing and purchasing additional capacity. The company has announced plans to buy three of Catalent’s fill-finish sites for $11 billion upfront—allowing Novo Holdings, the asset manager of the foundation that controls Novo Nordisk, to recoup about two-thirds of the $16.5 billion it plans to spend on acquiring the contract development and manufacturing organization (CDMO).
Potential delay
However, the U.S. Federal Trade Commission (FTC) signaled a potential delay in approving the transaction when the agency on Thursday sent Catalent and the Novo Nordisk Foundation each a second request for additional information and documentary materials in connection with the deal, Catalent disclosed Friday in a regulatory filing. Catalent and Novo Holdings expect to close their deal toward the end of 2024.
Speaking with analysts this past week, Novo Nordisk CFO Karsten Munk Knudsen acknowledged that prices for Wegovy and Ozempic fell due to an increase in supply and increased competition. “Given increasing volume and competition, net pricing like-for-like will be down in the U.S.” through this year, Knudsen added.
Novo Nordisk’s supply and pricing challenges explain why investors have sold enough shares to lower the company’s share price in recent days—even as the weekly number of patients starting to use Wegovy injections for obesity in the United States more than quintuipled, from 5,000 in December to 27,000 now, CEO Lars Fruergaard Jørgensen said on the company’s earnings call.
Lilly markets the type 2 diabetes drug Mounjaro® (tirzepatide), whose active ingredient is the same one in Zepbound®, which won FDA approval last November as a treatment for adults with obesity or who are overweight. On Tuesday, Lilly reported first-quarter results showing Mounjaro revenue had more than tripled year-over-year, zooming 218% from $568.5 million to $1.807 billion, while Zepbound racked up $517.4 million in Q1 revenue.
For months, analysts expected a third potential weight loss drug blockbuster drug to emerge from Viking. Shares of Viking nearly doubled in March after the San Diego biotech announced positive topline results from its Phase II VENTURE trial (NCT06068946) evaluating a subcutaneous form of its lead clinical candidate VK2735 in patients with obesity. Viking this year has also reported positive results from a Phase I study (NCT05203237) of its novel tablet formulation of VK2735.
“We plan to meet with regulators to discuss the path forward for both programs and expect to advance each into further development later this year,” Viking CEO Brian Lian, PhD, said April 24 in a statement.
Leaders and laggards
- Addex Therapeutics (ADXN) shares nosedived 53% from $16.10 to $7.54 on Monday after the company acknowledged that its epilepsy candidate ADX71149 (JNJ-40411813), partnered with Janssen Pharmaceuticals (Johnson & Johnson), failed a Phase II trial (NCT04836559) by not achieving statistical significance for the primary endpoint of time for patients to reach baseline seizure count when the drug was added to standard of care. The trial assessed adjunctive administration of ADX71149—a selective metabotropic glutamate subtype 2 (mGlu2) receptor positive allosteric modulator (PAM)—in patients with focal onset seizures with suboptimal response to levetiracetam or brivaracetam. Over the past month, Addex shares have plunged 73% from a high of $27.90 at the close of trading on April 9.
- Annovis Bio (ANVS) shares plummeted 60% from $18.01 to $7.28 on Monday, after the company trumpeted positive results from a Phase II/III trial (NCT05686044) comparing buntanetap vs. placebo in patients with mild to moderate Alzheimer’s disease (AD). However, the significantly higher improvement in ADAS-Cog 11 scores shown for buntanetap was in a 90-patient subgroup of mild AD patients, not the 325 patients who completed the study. Mild AD patients dosed with buntanetap showed a 3.3-point improvement in ADAS-Cog 11 scores vs. 0.3 points for placebo, Annovis said. “From ANVS’ perspective, this was a striking result, but investors remain skeptical especially given the non-prespecified nature of the subgroup,” analyst Sumant Kulkarni of Canaccord Genuity countered. Kulkarni lowered his firm’s 12-month price target on Annovis shares 28%, from $36 to $26.
- CytomX (CTMX) shares more than tripled, rocketing 215% from $1.63 to $5.13 on Wednesday, after the company promoted a May 8 update it plans to give on its lead pipeline candidate CX-904 (masked EGFRxCD3 Probody® T-cell engager) program being co-developed with Amgen (AMGN), including presenting preliminary results from the ongoing Phase Ia CTMX-904-101 dose escalation study (NCT05387265) in adults with metastatic or locally advanced unresectable solid tumors. CX-904 is designed to target the epidermal growth factor receptor (EGFR) on cancer cells and the CD3 receptor on T cells. Also on May 8, CytomX plans to release first quarter 2024 results.
- Emergent BioSolutions (EBS) shares more than doubled, rocketing 102% over two days, from $1.93 on Wednesday to $3.30 Thursday and $3.89 on Friday, after the company announced a restructuring plan that included eliminating the jobs of about 300 current employees, eliminating about 85 vacant positions, and shutting down two Maryland sites—its Baltimore-Bayview Drug Substance manufacturing facility, and its Rockville Drug Product facility. Emergent said it will concentrate its operations at sites in Winnipeg, Manitoba, Canada, and Lansing, MI, “while the company actively explores strategic alternatives for its other sites throughout the year.” Emergent said the cuts are expected to cost approximately $18 million to $21 million, primarily in the second half of this year, but are projected to save the company about $80 million annually when fully implemented. Emergent added that it will focus on its core products business—medical countermeasures and NARCAN® Nasal Spray—and on satisfying patients and customers, including the United States and allied governments.
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