Amgen Earnings: Raising Our Fair Value Estimate by 18% With Obesity Update

Amgen’s first-quarter product sales grew 22%, or 6% excluding the October 2023 acquisition of rare-disease firm Horizon Therapeutics, slightly ahead of our expectations. Management narrowed its top- and bottom-line guidance for the full year. In conjunction with earnings, Amgen announced that it has completed an interim analysis of a phase 2 trial of obesity drug candidate maritide (AMG 133). Although Amgen did not disclose many details, management was encouraged enough to announce that the program will move to phase 3 in obesity, obesity-related indications, and diabetes, an area where theoretical concerns about blood sugar effects of the drug had previously made development less appealing. We think the most likely scenario is that interim data showed manageable tolerability, solid safety, efficacy that rivals the top drug candidates in development (around 25% weight loss), and a differentiated dosing profile (monthly or perhaps quarterly dosing).