The strongest competitors have poor data, will the "weight loss duo" continue to dominate?

The latest data on Amgen's highly anticipated experimental obesity treatment drug MariTide has been released, bringing relief to the "weight loss duo."

On Tuesday, The Wall Street Journal reported that Amgen announced its MariTide helped patients lose about 20% of their weight in clinical trials, but accompanying side effects such as nausea and vomiting were quite common, seemingly insufficient to compete with the drugs of the "duo." More detailed data is expected to be released at next year's medical conference.

After the report was released, Amgen's stock fell more than 12.3% at one point, and it has dropped 2.47% over the past five days.

Amgen's Data Performance Underwhelming, Progress Lagging

Data shows that MariTide's weight loss effect did not surpass Eli Lilly's Zepbound, and its competitors Eli Lilly and Novo Nordisk are developing next-generation drugs, with disclosed weight loss effect data appearing more promising, which also means the market leadership of these two companies is not threatened. Nicholas Anderson, a portfolio manager at Thornburg Investment Management, stated:

"If Amgen's weight loss drug had achieved a 20% weight loss effect a few years ago, it would have been the best among its peers, but now Eli Lilly and Novo Nordisk's pipeline drugs may achieve or exceed a 25% weight loss effect."

Additionally, these two companies' drugs are about to complete Phase III trials, while MariTide has just completed Phase II and still needs to undergo large-scale and expensive Phase III procedures.

"Weight Loss Duo" Continues to Dominate

In the pharmaceutical field, introducing new medical methods does not guarantee a company's long-term leadership or market share. However, the obesity field seems different, as the first entrants appear more likely to maintain their leadership.

From large pharmaceutical companies including Amgen, Pfizer, and AstraZeneca to smaller biotech firms like Viking Therapeutics and Structure Therapeutics, dozens of companies are developing drugs that could potentially capture market share, with analysts predicting this market will become the largest pharmaceutical market in history.

However, while some of the new methods they are introducing can provide patients with different treatment options, none have shown the potential to truly shake the dominance of the "weight loss duo."

As the "strongest competitor," Amgen's MariTide seems to offer a certain advantage in its mechanism of action. Since Zepbound and Wegovy are peptide-based drugs that directly activate GLP-1 receptors to promote weight loss, MariTide uses antibodies linked to peptides, which may enhance durability and minimize weight rebound. The increased durability allows MariTide to be administered in smaller doses while still being effective, which is also why investors are excited about the data But for any drug, investors will focus on two key factors: efficacy and side effects. In these two aspects, MariTide looks good, but it is not without weaknesses, especially in terms of side effects:

In the trial, about 11% of patients in the group receiving gradually increasing doses of the drug withdrew from the MariTide trial due to side effects, with less than 8% withdrawing due to gastrointestinal issues. Amgen reported that 70% of patients in this group experienced nausea, and 40% experienced vomiting, although these symptoms typically resolve.

There are also analyses suggesting that if the goal is merely to secure a place in the market, Amgen does not need to be the best. Assuming its advantages as a long-acting drug ultimately allow it to capture 10% of the market share, this would still be a significant presence in the weight loss drug market.

Additionally, for investors, Amgen offers an attractive entry point, as its stock price largely reflects the market's underestimation of this opportunity, with the company's stock price currently close to the level before it announced its obesity portfolio.

BMO Capital Markets analyst Evan Seigerman also pointed out:

"The once-monthly injection of MariTide also provides manufacturing advantages, and its improvements in blood pressure may indicate broader cardiovascular benefits."