Amgen Inc.'s stock faced a decline after Truist analyst Srikripa Devarakonda downgraded the stock, citing concerns that the current stock price already reflects investor optimism surrounding Amgen's obesity drug candidate, MariTide. The near-term investor focus is on the upcoming Phase 2 data release for MariTide, Amgen's potential competitor to Novo Nordisk's Ozempic and Wegovy, as well as Eli Lilly's Zepbound and Mounjaro.
Amgen's Chief Financial Officer, Peter Griffith, previously expressed excitement about the Phase 2 study results for MariTide, expected in late 2024, and mentioned preparations for a Phase 3 program targeting obesity, obesity-related conditions, and Type 2 diabetes.
Analyst's Perspective on MariTide Data
Devarakonda anticipates the Phase 2 obesity data to align with previous findings. However, considering it is only Phase 2 data and the competitive landscape, she believes the current stock price already accounts for potential opportunities. According to Devarakonda, stellar data could increase the stock price by $20 to $40, while weak data, particularly if MariTide demonstrates less efficacy than Zepbound, could result in a $40 to $50 decrease.
"If data are in-line with a profile that is not clearly differentiated, we expect the stock to trade sideways given the crowded obesity landscape," Devarakonda wrote in a note to clients. "We believe that safety is key and if it is worse than expected, the stock could be down 10%-20%, in our view."
Other Concerns
Devarakonda also expressed concerns about Amgen's rocatinlimab in atopic dermatitis, noting the highly competitive landscape despite the drug's demonstrated activity and upcoming Phase 3 data. Amgen is scheduled to release its third-quarter results on October 30.
