Amgen (AMGN) stock went down on Monday, while Eli Lilly (LLY) stock hit a record high after the biotech company announced that its experimental weight-loss drug showed promising results over 150 days.
In one study by Amgen, patients received the same dosage three times. At the highest dose, they lost an average of 8.2% of their body weight over 92 days. Compared to this, patients receiving a placebo gained 1.7% more body weight during the same time frame.
Another study tested doses that increased over time. The regimen that increased to the highest dose resulted in a 14.5% body weight loss over 85 days, compared to a 1.5% gain for the placebo group. The weight loss was maintained after 150 days.
However, in the second study, every patient who received the highest dose reported feeling nauseous, and three-quarters experienced vomiting. All of these events were mild and resolved within 72 hours. Ultimately, half of the high-dose group dropped out of the study after the first dose, according to William Blair analyst Matt Phipps.
“Nausea and vomiting is expected with the GLP-1 receptor class of medicines, but 50% of patients discontinuing after the first dose at 420 milligrams is a concern,” he said. Other drugs in the same class usually have their dosages increased slowly over time. “This will be something to watch for in the full Phase 2 results (from Amgen) later this year.”
On the stock market, Amgen stock dropped 0.4% to close at 321.97. Meanwhile, Eli Lilly stock surged 5.8% to close at 706.20. Novo Nordisk (NVO), another player in the weight-loss drugs arena, saw its shares rise 4% to close at 118.26.
Part of Novo Nordisk’s stock increase follows Novo Holdings’ $11.5 billion acquisition of Catalent (CTLT). Novo Holdings is the majority shareholder of Novo Nordisk. Catalent is a contract drug manufacturer and is already involved in making Novo’s obesity and diabetes medications.
Amgen Stock: Entering the Weight-Loss Drugs Market
The results could help Amgen break into the weight-loss drugs market. Lilly and Novo currently dominate the space, which became more competitive last year. Eli Lilly stock soared over 59% in 2023, while Novo Nordisk stock surged 53%.
However, industry observers believe there is room for more competition in the market, which is large. The purchase of Catalent will aid Novo in boosting production. Novo has been struggling to meet demand due to the rising interest in weight-loss drugs. Eli Lilly, on the other hand, only recently gained approval for its rival, Zepbound, last year.
Nevertheless, Amgen’s results are still in the early stages, and it could take years before the company can launch an obesity treatment. According to analysts polled by FactSet, no sales are expected by 2028, which is the latest year for which there are estimates.
Despite this, Amgen stock is also trading at a record high. Shares broke out of a cup base with a buy point at 288.46 in late December, according to MarketSmith.com. The stock is now well above the buy zone.
This story has been corrected to reflect Amgen’s studies were performed in human participants.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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