Amgen stock sinks as weightloss drug fails to impress

• Amgen's MariTide weightloss drug finished its second phase of experiments.
• Wall Street analysts did not think the data showed enough differentiation.
• Citi lowered its price target on Amgen stock to $310 from $335.
• AMGN stock slid below $258 before recovering into the $270s.

Amgen (AMGN) stock is losing weight on Tuesday after its weightloss drug left more questions than answers. The phase-2 MariTide results showed that participants lost about 20% of their weight over a yearlong period while taking the GLP-1 drug. Analysts said this was toward the lower end of results compared with the leading sector drugs on the market from Novo Nordisk (NOVO) and Eli Lilly (LLY).

Amgen stock plunged below $258 before backtracking up toward $277 at the time of writing. Still, that hands shareholders a ~6% loss on the day.

The Dow Jones Industrial Average (DJIA), which includes Amgen, gained about 0.3% toward the end of the session following losses in the morning. The market fell in the morning due to President-elect Trump announcing his plan to immediately slap China, Canada and Mexico with tariffs upon entering office in late January via executive 

Amgen stock news

The phase-2 trial data for MariTide claims that participants who were obese or overweight but without Type 2 diabetes were able to shed 20% of their weight in a little over a year. At the exact one-year mark, however, they were down a lesser 17%. 

This is good in general but not industry-leading as most other GLP-1s undergoing their experimental phase have a successful weight loss rate of 20% to 25%. Additionally, Wall Street analysts were hoping for more specifics about the onve-monthly or once-quarterly injection results, but Amgen did not give the market much to hang their hat on.

"Without monthly dosing, there could be headwinds in MariTide carving a long acting injectable niche in the market,” wrote Citi analyst Geoff Meacham. The analyst cut his AMGN price target from $335 to $310.

Analyst Michael Yee with Jefferies disagreed somewhat, saying, “The data supports monthly and maybe less frequent dosing, but it is not clear yet if quarterly dosing is a potential.”

The current GLP-1s on the market require weekly injections and have shown weightloss for obese adults of between 15% and 20%. Yee, however, stuck with his $380 price target.

In other news, President Joe Biden signaled his interest in allowing government insurance platforms Medicare and Medicaid to pay for GLP-1s for patients, a move that would greatly increase their demand among the general public. It is not certain whether this policy shift could be taken before the Trump administration takes office in less than two months.

Amgen stock forecast

Amgen has recovered quite well from the initial upset. Truly, the trial results aren't that bad, but they may not be what's necessary for a $100 billion drug. It is now well above the $260 support, which it had initially broken through.

That break may signal, however, that further weakness is to come. If so, the summer 2023 support band from $211 to $218 may be the next viable option. To re-engineer a recovery, AMGN must first reclaim the 200-day Simple Moving Average (SMA), which is now at $305.

AMGN daily stock chart