Amgen's weight loss drug shows impressive results with a 20% reduction in weight, but the side effects are relatively high, causing the stock price to drop by as much as 12.3%!

On Tuesday, due to the Biden administration's plan to include weight loss drugs in Medicare and subsidy programs, Novo Nordisk rose over 3%, and Eli Lilly rose nearly 6.9% at one point.

While weight loss drug companies saw a general surge, Amgen (AMGN) experienced a drop of over 12.3%. The reason is that although the efficacy of Amgen's MariTide weight loss drug met Wall Street's expectations, the side effects were relatively high and it failed to outperform Eli Lilly's blockbuster drug Zepbound, with trial results falling short of Wall Street's high expectations for MariTide. Before the data was released, some analysts even hoped for a weight loss of 25%.

Amgen stated that in a one-year trial, non-diabetic patients taking MariTide once a month or less lost up to 20% of their weight. Late-stage studies of Wegovy showed a 15% weight loss over 68 weeks, while Zepbound helped patients lose over 22% of their weight over 72 weeks.

Analysts pointed out that this is comparable to the maximum dose effect of Eli Lilly's Zepbound. However, both Zepbound and Novo Nordisk's Wegovy are administered once a week, so MariTide may have an advantage over the more popular weekly injections on the market.

However, data shows that MariTide has greater side effects than Zepbound. About 11% of patients dropped out of the MariTide trial due to side effects, while in Zepbound's phase 3 trial, that figure was about 7%. These side effects are primarily gastrointestinal, which is expected for this class of drugs.

Amgen responded that nausea and vomiting are usually mild and transient, mainly related to initial dosing, and that they address these symptoms by slowing the dosing schedule.

Amgen's Advantages: Lower Treatment Frequency, New Mechanism of Action

It is worth noting that Amgen further stated that patients taking the maximum dose of MariTide every two months experienced weight loss effects comparable to those taking it once a month, indicating that the drug may have the potential for lower frequency dosing.

Secondly, MariTide employs a completely new approach compared to existing drugs on the market. Amgen's weight loss drug MariTide uses a mechanism different from Eli Lilly's Zepbound. Zepbound enhances satiety and lowers blood sugar levels by mimicking two hormones (GLP-1 and GIPR). MariTide mimics GLP-1 and inhibits the activity of GIPR.

Furthermore, users of MariTide did not experience a "plateau" during the weight loss process. RBC Capital Markets analyst Gregory Renza stated in a report:

"This may indicate that the combination mechanism of GLP-1 agonists and GIPR antagonists allows for more convenient dosing and may lead to more sustained long-term weight maintenance effects, which is a significant distinction of MariTide compared to other GLP-1 drugs." It is worth noting that Amgen also stated that patients with type 2 diabetes can achieve a weight loss of up to 17% without a plateau, indicating that there may still be potential for further weight loss after 52 weeks. Additionally, their glycated hemoglobin (HbA1c), an indicator of blood sugar levels over time, decreased by 2.2%.

Moreover, patients' cardiac metabolic indicators improved, including blood pressure, triglycerides, and high-sensitivity C-reactive protein (hs-CRP).

Amgen also pointed out that the levels of free fatty acids in patients did not significantly increase after using MariTide. In contrast, David Risinger, an analyst at Leerink Partners, mentioned that a meta-analysis of two studies on Eli Lilly's Zepbound found that free fatty acid levels decreased by about 7.5%. Free fatty acids are released by adipose tissue (fat cells) and are closely related to insulin resistance and heart disease.

It is noteworthy that Amgen also stated that no evidence of bone loss was found among users of MariTide. Previously, on November 12, reports indicated that early tests might have linked MariTide to bone loss, which caused Amgen's stock price to drop sharply.

Amgen's CEO Robert Bradway stated during Tuesday's investor conference call:

"Based on this data, we believe MariTide has unique differentiation and competitive advantages, and we will further explore these advantages in Phase III development."

Additionally, Amgen announced the initiation of the second part of the trial, which will explore lower doses and less frequent dosing regimens. Renza noted that about 90% of patients are continuing to participate in this part of the trial. Amgen also announced the initiation of its Phase III trial named Maritime.

Amgen stated that MariTide may offer faster weight loss effects, potentially better weight maintenance, and fewer injection frequencies compared to weekly injectable drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound. Analysts pointed out that this could enhance Amgen's chances of capturing a share of the weight loss drug market. Some analysts predict that the annual value of the weight loss drug market could reach as high as $150 billion by the early 2030s