Amgen Stock Slumps as Eli Lilly Hits Record High, Experimental Weight-Loss Drug Shows Promising Results
Amgen (AMGN) stock slumped on Monday, while Eli Lilly (LLY) stock reached a record high, following the announcement from the biotech company that its experimental weight-loss drug showed durability for up to 150 days.
How Novo Nordisk, Wegovy and Ozempic Are Changing the Weight-Loss Game
Novo Nordisk (NVO), the maker of Ozempic and Wegovy, is seeing a surge in demand for diabetes and obesity drugs, leading to a significant increase in revenue. Along with competitor Eli Lilly (LLY), Novo Nordisk has experienced a substantial stock surge due to the growing weight-loss craze. Investors are now assessing the potential of these popular medications to not only meet current demand but also impact long-term weight management.
Positive Results in Amgen Study Show Significant Weight Loss
In a recent study conducted by Amgen, patients were administered the experimental weight-loss drug in three different dosages. The highest dosage resulted in an average weight loss of 8.2% over a span of 92 days. In comparison, patients in the placebo group gained 1.7% more body weight during the same time period.
In a separate study, doses of the drug were increased gradually. The regimen with the highest dosage led to a remarkable 14.5% weight loss over 85 days, while the placebo group experienced a 1.5% weight gain. The weight loss benefits were still evident even after 150 days.
However, it is important to note that in the second study, all patients who received the highest dosage reported mild cases of nausea, and three-quarters experienced vomiting. These side effects resolved within 72 hours. Although nausea and vomiting are common with the GLP-1 receptor class of medicines, the study raised concerns as 50% of patients discontinued after the first dose of 420 milligrams. Analysts anticipate that the complete Phase 2 results from Amgen, expected later this year, will shed further light on this issue.
Market Reaction: Stocks In Focus
Following the announcement, Amgen stock declined by 0.4% to close at 321.97 on the stock market yesterday. Conversely, Eli Lilly stock surged by 5.8% to close at 706.20. Novo Nordisk, another key player in the weight-loss drugs market, saw a 4% rise in its shares, closing at 118.26.
Novo Nordisk’s stock saw a boost recently, partly due to parent company Novo Holdings’ acquisition of Catalent (CTLT) for $11.5 billion. Catalent, a contract drug manufacturer, is already involved in the production of Novo’s obesity and diabetes medications. With the help of Catalent’s capabilities, Novo Nordisk aims to enhance its production and meet the increasing demand for weight-loss drugs.
Amgen Stock: Breaking Into the Weight-Loss Drugs Market
The recent encouraging results from Amgen’s weight-loss drug trials could provide an opportunity for the company to enter the lucrative weight-loss market. While Eli Lilly and Novo Nordisk currently dominate the space, market analysts believe there is the potential for more competitors to enter this high-demand market. Novo Nordisk’s acquisition of Catalent is an integral part of this strategy, as Novo Nordisk aims to boost its production capabilities. Eli Lilly, on the other hand, gained approval for its weight-loss drug, Zepbound, just last year.
Although Amgen’s results are still in the early stages, it may take several years before the company can successfully launch an obesity treatment. Analysts surveyed by FactSet do not anticipate any notable product sales until at least 2028.
Despite this timeline, Amgen stock continues to perform well and reached a record high. Its shares broke out of a cup base with a buy point at 288.46 in late December, and the stock price is currently well above the buy zone.
This story has been corrected to reflect Amgen’s studies were performed in human participants.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
