Equities
Amgen's shares surge 12% on CEO's optimism for experimental obesity drug MariTide, signaling a strong entry into the competitive weight-loss market.
By Bill Bullington
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Amgen Inc. experienced a notable surge in its stock price during late trading, following positive remarks from CEO Robert Bradway about the early results from a study on the company's experimental obesity drug, MariTide. Bradway expressed his encouragement and confidence in MariTide's potential to meet significant unmet medical needs in the obesity sector. This optimism led to a 12% increase in Amgen's shares after US markets closed, setting the stage for what could be the company's most significant intraday rise since 2009.
Amgen, headquartered in Thousand Oaks, California, is positioning itself as a formidable competitor in the weight-loss drug market, challenging the current dominance of Eli Lilly & Co. and Novo Nordisk A/S. The demand for such drugs is skyrocketing, with Bloomberg Intelligence's Michael Shah suggesting that the market could exceed $80 billion in annual sales by 2030. Amgen is already preparing for MariTide's production, despite the drug still undergoing mid-stage studies and awaiting regulatory approval.
In addition to its developments in obesity treatments, Amgen announced its decision to discontinue the development of another early-stage drug, AMG 786, to concentrate efforts on MariTide. This strategic shift underscores the company's commitment to addressing obesity and related conditions, including diabetes, with plans for late-stage studies and a monthly autoinjector delivery system for the drug.
The broader market saw varied movements, with tech stocks like Apple experiencing gains, while others like Cloudflare and Expedia faced declines. These shifts reflect a dynamic postmarket trading environment, influenced by earnings reports and forecasts that exceeded or fell short of expectations. Notably, companies such as Block and Paylocity also saw significant gains, highlighting the diverse outcomes within the tech sector and beyond.
Amgen's advancements in the obesity drug market come at a time of intense competition and high demand for effective weight-loss solutions. The company's proactive investment in MariTide's production capacity, even before final regulatory approval, signals a strong belief in the drug's potential and a strategic move to secure a foothold in this lucrative market.
The decision to focus on MariTide and halt the development of AMG 786 reflects a broader trend in the pharmaceutical industry, where companies are prioritizing resources on candidates with the highest potential impact. This approach not only streamlines research and development efforts but also aligns with market demands and investor expectations for innovative and effective treatments.
"Demand for anti-obesity drugs like Zepbound and Wegovy is so insatiable that Bloomberg Intelligence’s estimate for $80 billion in annual sales by 2030 is now looking conservative."
Robert Bradway, CEO of Amgen:
"We recognize the significant interest in obesity... We are confident in MariTide’s differentiated profile and believe it will address important unmet medical needs."
Jay Bradner, R&D Chief at Amgen:
"The company will focus on MariTide and discontinue development of another, earlier-stage drug called AMG 786."
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