Why Amgen's Weight Loss Result Is a Win for Eli Lilly

Core Viewpoint - Amgen's anti-obesity candidate MariTide showed a weight reduction of up to 20% after 52 weeks, but this result may not be sufficient to position it as a market leader in the weight management sector [1][5][6] Group 1: MariTide's Performance - MariTide is a GLP-1 agonist that also inhibits GIP receptors, but its phase 2 trial results were underwhelming compared to competitors like Eli Lilly's Zepbound, which achieved a 22.5% weight loss after 72 weeks [3][4][5] - Analysts had hoped that MariTide's mechanism of action would differentiate it from Zepbound, but the results suggest it may not be more effective [4][6] Group 2: Amgen's Overall Growth - Despite MariTide's performance, Amgen's overall product sales grew by 24% year over year in Q3, driven by the acquisition of Horizon Therapeutics [7] - Amgen's thyroid eye disease drug Tepezza generated $488 million in Q3 sales, indicating potential for growth in rare disease markets [8][9] - The company is currently testing 23 different molecules in phase 3 clinical trials, suggesting a robust pipeline for future growth [9] Group 3: Investment Considerations - Amgen's shares have fallen by about 7% in 2024, but the stock is trading at a reasonable valuation of 13.7 times the midpoint of management's earnings guidance for 2024 [10][11] - The company offers a 3.3% dividend yield and has a history of increasing its dividend payout, having raised it by over 40% since 2021 [11][12] - The lackluster results from MariTide should not deter investors, as Amgen has multiple growth drivers that could enhance its stock value [12]