SUPERNEWS

Equities

Novo Down 5.3%, Amgen Up as Obesity Drug Race Heats Up

Novo Nordisk's stock falls 5.3% amid competition fears as Amgen's obesity drug MariTide shows promise, shaking up the $80 billion market.

By Alex P. Chase

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5/3, 05:44 EDT
Amgen Inc.
Eli Lilly and Company
Novo Nordisk A/S
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Key Takeaway

  • Novo Nordisk's stock fell 5.3% after Amgen revealed promising results for its obesity drug MariTide, intensifying competition.
  • Amgen's shares jumped 13% premarket on MariTide optimism, while the obesity drug market is projected to exceed $80 billion by 2030.
  • Strategic focus shifts as Amgen discontinues AMG 786 to prioritize MariTide, highlighting the high stakes in the obesity treatment sector.

Market Response to Obesity Drug Developments

Novo Nordisk A/S experienced a notable decline in its stock value, dropping as much as 5.3% following comments from Amgen Inc.’s CEO regarding promising early results from their experimental obesity drug, MariTide. This downturn added to a previous 2.7% decline after Novo Nordisk reported sales of its Wegovy weight-loss drug that did not meet the high expectations of analysts. Despite these challenges, Novo Nordisk has seen its market capitalization exceed $500 billion earlier this year, buoyed by the success of its Wegovy and Ozempic drugs. In contrast, Amgen shares surged by 13% in premarket trading after the optimistic update on MariTide.

Competitive Dynamics in the Obesity Drug Market

The obesity drug market is witnessing intense competition and growing interest, with Amgen's MariTide entering as a potential new contender against established players like Novo Nordisk and Eli Lilly & Co. Barclays Plc analyst Emily Field commented on the situation, stating it's too early to assess the competitive impact on Novo and Eli Lilly, emphasizing the need to see more data. Amgen's CEO, Robert Bradway, expressed confidence in MariTide's unique profile and its ability to meet unmet medical needs within the obesity sector. Bloomberg Intelligence analyst Michael Shah highlighted the soaring demand for anti-obesity drugs, suggesting the market could surpass $80 billion in annual sales by 2030.

Strategic Shifts and Market Movements

Amgen announced it would focus its efforts on MariTide, discontinuing the development of another drug, AMG 786. This decision reflects a strategic prioritization towards addressing obesity and related conditions, with plans for late-stage studies and a monthly autoinjector delivery system for MariTide. The broader market saw varied movements, with some tech stocks experiencing gains while others faced declines, indicating a dynamic trading environment influenced by diverse factors including earnings reports and market forecasts.

Street Views

  • Emily Field, Barclays Plc (Neutral on Novo Nordisk and Eli Lilly & Co.):

    "As of today, we see no cause for concern regarding the competitive dynamics versus the market leaders... We really will need to see the data."

Management Quotes

  • Robert Bradway, CEO of Amgen:

    "Very encouraged by early results from a study of MariTide."