Investing.com -- Shares of Amgen (NASDAQ: NASDAQ:AMGN) dropped 7.4% in premarket trading Tuesday following the release of Phase 2 trial results for its obesity drug candidate, MariTide (formerly AMG 133).
While the study demonstrated notable weight-loss potential, investor expectations for the drug's efficacy may have been higher, contributing to the stock's decline.
Amgen reported that MariTide, a monthly or less frequent injectable, delivered up to 20% average weight loss at 52 weeks in patients without Type 2 diabetes and 17% in those with the condition.
Notably, no weight-loss plateau was observed, suggesting further potential with continued use. Additionally, MariTide is said to have improved key cardiometabolic parameters such as blood pressure and triglycerides while reducing hemoglobin A1C by up to 2.2 percentage points in diabetic patients.
However, analysts had set a benchmark of at least 20% weight loss in the trial, with some hoping for results closer to 25%. The Phase 2 outcomes fell short of these higher expectations, prompting skepticism about MariTide's ability to compete in the increasingly crowded obesity drug market.
Amgen's announcement comes amid heightened focus on the sector. Rivals Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) have drugs competing in the space. Shares of both companies rose roughly 4% following Amgen's update.
Despite the stock reaction, Amgen remains optimistic about MariTide's future, with plans to launch a Phase 3 program, MARITIME, to explore the drug's applications in obesity and related conditions.
CEO Jay Bradner emphasized the drug's "differentiated profile" and "potential new treatment option for patients."