Amgen Shrugs Off Bone Density Concerns Related to Obesity Candidate

Key TakeawaysAmgen refutes in a press release that its trial obesity drug, MariTide, may cause bone loss density.Amgen's stock has risen 4.6% this year against a decrease of 3.8% for the pharmaceuticals industry.Register now to see our 7 Best Stocks for the Next 30 Days report - free today!Amgen AMGN, in a press release, dismissed recent concerns that its obesity candidate, MariTide, may cause loss of bone mineral density (“BMD”). Some analysts at a global financial services firm claimed that a review of phase I data on MariTide showed that the candidate led to a drop in BMD, which is a measure of the amount of minerals in bones. Reduced BMD can increase the risk of fractures. The data from the phase I study were published in a journal in February. The concerns resulted in a sharp decline in the stock price on Tuesday.Amgen, in the latest press release, said there was no connection between the administration of MariTide and BMD changes. The phase I data do not indicate any concerns related to bone safety. The stock recovered on Wednesday after Amgen’s statement.Top-line 52-week data from the phase II study on MariTide, a GLP-1 receptor candidate in overweight or obese adults, is expected in late 2024, which will be a key catalyst for the stock. Amgen is planning to conduct a comprehensive phase III program on the candidate across obesity, obesity-related conditions and type-II diabetes. Amgen began a phase II study on the candidate in type II diabetes in the third quarter.Amgen has some preclinical obesity candidates in its pipeline, including oral and injectable approaches comprising both incretin and non-incretin mechanisms. Amgen began a phase I study on one of these candidates, AMG 513 for obesity, in the third quarter.Amgen’s stock has risen 4.6% this year against a decrease of 3.8% for the industry.Image Source: Zacks Investment ResearchSome analysts felt the BMD risk issue was overblown. They are not overly concerned, as significant weight loss naturally leads to reduced BMD. However, another group of analysts believes that investors should be cautious of this candidate after the reports about MariTide’s impact on BMD.LLY & NVO — Key Players in the Diabetes and Obesity MarketMariTide is a closely watched drug in the obesity market. The GLP-1 segment of the diabetes and obesity market is gaining significant popularity.Some popular GLP-1 receptor drugs available in the market are Eli Lilly’s LLY tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound and Novo Nordisk’s NVO semaglutide, approved as Ozempic pre-filled pen and Rybelsus oral tablet for type II diabetes and as Wegovy injection for weight management. All these products are witnessing significant demand.However, quarter-over-quarter growth of Lilly’s Zepbound and Mounjaro in 2024 has been impacted by supply and channel dynamics. In the second quarter, increased supply led to higher shipments, which allowed the company to fulfill all backorders for its wholesales. However, channel inventory decreased at wholesalers in the third quarter, which hurt sales of the drugs. Novo Nordisk’s diabetes and obesity products also failed to meet investor expectations in the third quarter. Ozempic sales rose 26% at a constant exchange rate and Wegovy sales rose 81%. However, Novo Nordisk said it was concerned about periodic supply constraints and drug shortages of its semaglutide products.Another small biotech Viking Therapeutics VKTX is making rapid progress with the development of VK2735, a GLP-1 and GIP receptor agonist, which is being developed as an oral and a subcutaneous (SC) formulation for treating obesity. While management intends to start a mid-stage study on the oral formulation of the drug before this year’s end, it has scheduled an end-of-phase II meeting with the FDA in fourth-quarter 2024 to discuss the design and timing for the planned phase III study on the SC formulation of the drug.AMGN’s Zacks RankAmgen has a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Amgen Inc. Price and Consensus Amgen Inc. price-consensus-chart | Amgen Inc. 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