Amgen inventory soars on weight reduction injection progress as Novo Nordisk, Eli Lilly shares slide

Amgen‘s inventory rose greater than 12% on Friday after the drugmaker teased positive initial data on its experimental weight reduction injection. 

That fueled investor considerations about new competitors within the quickly rising weight reduction drug trade, sending shares of the present weight problems gamers, Novo Nordisk and Eli Lilly, decrease on Friday. Eli Lilly shares dropped almost 3%, whereas Novo Nordisk’s U.S.-traded shares fell greater than 1%.

Novo Nordisk’s inventory was already below strain on Thursday after gross sales of its blockbuster weight reduction injection Wegovy missed analysts’ estimates for the primary quarter as a result of decrease pricing. 

Throughout a first-quarter earnings name Thursday, Amgen’s CEO Bob Bradway mentioned he was “very inspired” by early outcomes from a mid-stage research on the corporate’s weight problems injection, MariTide. Traders have been laser-focused on that drug and the remainder of Amgen’s weight reduction drug pipeline because it races a number of different drugmakers to affix the booming market. 

“We’re assured in MariTide’s differentiated profile and consider it should handle essential unmet medical wants,” Bradway mentioned in the course of the name. 

Amgen didn’t present particular information, however its Chief Scientific Officer Jay Bradner mentioned that affected person dropout has not been a difficulty. He mentioned Amgen is on monitor to launch preliminary information from the research in late 2024 and can be planning late-stage research in sufferers with weight problems, obesity-related circumstances and diabetes. 

Bradway additionally highlighted the potential aggressive benefits of the injection, which sufferers will take utilizing a hand-held autoinjector as soon as a month and even much less steadily. That would provide way more comfort than the weekly injections in the marketplace, Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. 

“Whereas there was important debate on the potential efficacy and security of MariTide because the preliminary disclosures of the Section I information in 2022, we’ve got grown extra assured within the potential for the remedy to meaningfully differentiate from different therapies in growth, notably in regard to therapy intervals,” William Blair analyst Matt Phipps mentioned in a analysis word on Friday, including that the agency is upgrading its score on Amgen shares to “outperform.” 

Notably, Amgen mentioned it was scrapping its experimental oral weight problems drug. However that growth was not as essential because the MariTide replace, Jefferies analyst Michael Yee mentioned in a analysis word Thursday. 

Amgen’s Bradway mentioned the corporate has began increasing manufacturing for MariTide. That is a sign that the corporate is getting ready to supply sufficient provide of the drug — a significant concern that Novo Nordisk and Eli Lilly have grappled with over the previous 12 months and a half. 

Nonetheless, buyers have been happy with Eli Lilly on Tuesday after the corporate assured them that it might overcome ongoing provide constraints for its widespread medication. Eli Lilly hiked its full-year steering partially as a result of optimism round elevated manufacturing of Zepbound, its diabetes injection Mounjaro and comparable medication for the remainder of the 12 months.

Eli Lilly has a number of manufacturing websites both “ramping up or below building,” together with two areas in North Carolina, two in Indiana, one in Eire, and one in Germany, together with a seventh just lately acquired website, executives mentioned throughout an earnings name. 

In the meantime, buyers have been much less impressed with Novo Nordisk on Thursday. 

Gross sales of Wegovy in the course of the first quarter almost doubled however got here in below analysts’ expectations. That alerts that Novo Nordisk is struggling to fulfill demand for the therapy. 

However Novo Nordisk additionally pointed to fierce competitors from Eli Lilly’s Zepbound, which has shaken up pricing dynamics for Wegovy within the U.S. 

“Web pricing” for each Wegovy and Ozempic will likely be decrease within the U.S. all year long as a result of “growing quantity and competitors,” Chief Monetary Officer Karsten Munk Knudsen mentioned on a first-quarter earnings name on Thursday.