It's a race to the riches in the anti-obesity drug market. This therapeutic area is projected to grow exponentially in the coming years. Novo Nordisk is one of the clear market leaders -- for now -- thanks to its now-famous therapy, Wegovy. However, several companies have promising pipeline candidates they hope will eventually challenge Wegovy.
One of them is Amgen (AMGN -0.21%), one of the largest biotechs in the world. Amgen recently announced some news regarding its weight-loss pipeline, including the leading candidate therein. Let's find out what investors should make of these developments.
The glass is half full for Amgen
Amgen has talked about two notable weight-loss candidates in recent quarters. One of them is MariTide, which is currently in a phase 2 study. The other, AMG786, was undergoing a phase 1 clinical trial. During its first-quarter earnings conference call, Amgen said it would no longer pursue the development of AMG786. That's a bit of a setback for the drugmaker, but it is still going after the more promising of the two, MariTide.
Though Amgen hasn't yet shared many details about its ongoing mid-stage study for MariTide, it is clear that management sees it as an incredibly promising candidate. CEO Robert Bradway said the data the company has seen so far is very encouraging. Amgen is already drawing the outlines of a phase 3 study, though it plans to release data to the public from the ongoing trial later this year.
Thankfully, we do have some publicly available results from a phase 1 clinical trial for MariTide published in Nature. The broad lines are: MariTide proved effective at reducing weight and, importantly, at keeping the weight of studied patients down for up to 150 days after the treatment ended. That's one of the Achilles' heels of popular weight-loss medicines like Wegovy.
Though they effectively reduce body weight, some research has shown that many patients cannot maintain most of the weight loss after they stop taking the medicines. Here's another advantage MariTide may have over Wegovy. The latter is administered as an injection once a week. MariTide is a monthly injection, which, for most patients, will be preferable.
Amgen also has several pre-clinical anti-obesity programs it is working on right now.
Is the stock a buy?
The weight-loss market is an ideal target for Amgen, whose sales growth has been somewhat inconsistent in the past couple of years despite brand-new approvals. In the first quarter, the company's revenue increased by 22% year over year to $7.4 billion, although much of that increase was due to an acquisition. That aside, Amgen's top line was 6% higher than the year-ago period, a decent performance for a biotech giant.
Still, it will be several years before MariTide hits the market, if it goes that far. Investors shouldn't put too much weight on this candidate yet although it does look promising. However, the broader point is that Amgen is doing what it is supposed to do: develop brand-new therapies to get around the fact that some of its older medicines have struggled.
The biotech's October acquisition of Horizon Therapeutics for about $28 billion also allowed it to get its hands on several pipeline candidates, not to mention a promising medicine in Tepezza that treats thyroid eye disease and has been on the market since early 2020.
Amgen is on the verge of more brand-new approvals, too. These include cancer drug tarlatamab, which could earn the green light by mid-June. With its innovative wheel in full swing, Amgen's financial results should be fine.
And here's one more perk of investing in the company -- the company offers a competitive dividend program. Amgen has increased its payouts by 55% in the past five years and its forward yield tops 3% today. Amgen looks like a solid buy for long-term, income-seeking investors, not just because of its promising weight-loss medicine.
