On Thursday, Amgen (NASDAQ:AMGN) is discontinuing its experimental weight loss pill, choosing instead to focus on its injectable drug and other ongoing obesity product developments.
“Given the profile we’ve seen with [the oral drug], we will not pursue further development. Instead, in obesity, we’re differentially investing in MariTide and a number of preclinical assets,” said Jay Bradner, Amgen’s chief scientific officer during an earnings call Thursday.
The company’s shares surged more than 14% in premarket trading Friday.
The injectable treatment, named MariTide, is currently undergoing a mid-stage trial involving obese or overweight adults who do not have diabetes. Amgen is set to release initial data from this trial later in the year, with company executive Bradner saying he is “very pleased” with the preliminary results.
Moreover, Amgen is collaborating with regulatory authorities to organize a late-stage trial for MariTide and has also revealed plans for a second-stage trial of the drug aimed at treating diabetes.
Jefferies analysts said the positive MariTide commentary “should ease concerns and the bear case so far - and should have AMGN moving higher.”
“We like AMGN here after the recent pullback in past few months and believe it could rally after EPS behind us now and/or after the interim on '133 in summer, or more clearly after Phase II obesity data at YE if it looks like the best-case or base case scenarios given significant investor nervousness on this data,” they continued.
Meanwhile, BMO Capital Markets analysts have raised the Probability of Success (PoS) for MariTide to 35%, leading to an increase in their target price for the drug to $355 per share.