Packing A Heavier Punch

Amgen (AMGN) is having a moment. Early results for their injectable drug MariTide sound pretty darn promising. 

But it’s not all roses and sunshine at Amgen. The company also dropped the curtain on AMG786, an experimental oral weight-loss pill that just wasn't cutting it.

It’s tough in the pharmaceutical arena, especially since this whole weight-loss drug market is a gold rush right now. Eli Lilly (LLY) and Novo Nordisk (NVO) are cleaning up, and even Pfizer (PFE), despite their hiccup, isn't going to roll over that quickly.

Now, back to MariTide. Calling it a "multi-blockbuster" sounds flashy, but investors want to see if it can crack the hold those big two already have. Amgen's got a decent track record though, so I wouldn't write them off just yet.

The early scoop on MariTide is pretty tantalizing. The last round of Phase 2 trials showed that three monthly shots could significantly trim the waistline, with the heftier doses keeping the pounds off for up to four months post-treatment.

Actually, MariTide’s core strength is that it’s just once-a-month jab — an easier regimen compared to the weekly routine required by current front-runners like semaglutide and tirzepatide.

Speaking of the competition, Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide have been seeing users pack the pounds back on pretty quickly after stopping treatment.

That’s not ideal, and it’s exactly the kind of opening Amgen is looking to capitalize on with MariTide.

Now, let’s broaden our scope. It's a bit of a misnomer to just call it an “obesity pipeline” because, let me tell you, this technology is dipping its toes into much more than just shedding pounds.

Those GLP-1 agonists like semaglutide and the double-duty “double G” agonists like tirzepatide? They’re not just one-trick ponies.

Aside from battling the bulge, they’re making waves in treating diabetes, slicing through cardiovascular risks, and even exploring new frontiers like osteoarthritis and sleep apnea.

Heck, they’re even peeking into Alzheimer’s prevention — Novo Nordisk is already revving up for a phase 3 trial.

Despite these lucrative offshoots though, obesity remains the arena’s juggernaut.

Novo Nordisk’s latest data, as bleak as it might seem for global health, paints a picture of a market vast enough to entice anyone. Think about it—out of 813 million people wrestling with obesity, only one million are currently on these incretin drugs.

And with projections pointing to numbers ballooning to 1.2 billion by 2030, well, the potential market is jaw-dropping.

If Amgen’s MariTide hits the mark, we could be talking about a whopping $20 billion in annual sales from just this one contender in about 7-8 years, spanning obesity and a few neighboring conditions.

That’s even if they face a dogfight over pricing and if the average price per patient hangs below what the big guns like Novo Nordisk and Eli Lilly are currently pulling.

Now, think about this — current estimates peg Amgen’s growth from $33 billion this year to a modest $35.1 billion by 2033. My take? That’s wildly conservative.

If you ask me, Amgen's obesity pipeline alone, even with just modest success, could blast those numbers out of the water.

But let's not kid ourselves – MariTide alone won't make Amgen king of the obesity market. To truly capitalize on the segment’s potential, Amgen might need to consider teaming up with those emerging stars working on preserving lean body mass, or even big players like Regeneron (REGN).

They could take a couple of routes here. One slick move could be scooping up some smaller biotech firms or cozying up to bigger fish through partnerships or in-licensing deals to beef up their treatment options.

Alternatively, Amgen could play it cool and simply pair MariTide with their own upcoming products once they hit the market. Sure, this might keep things simple, but it kind of feels like leaving money on the table, isn’t it?

Admittedly, it’s still early days when it comes to these weight loss treatments. One thing's for sure: the next few years will be a wild ride for obesity drugs. After all, it’s clear that the GLP-1 craze is doing for pharma what AI hype is doing for tech stocks. It’s like a rising tide lifting all boats.

Looking ahead, the big winners in the next 18 months are looking to be Novo Nordisk and Eli Lilly. These guys are leading the pack, while others might just not make it to the finish line, ending up as flops in the stock market drama.

Yet, through all this, Amgen stands out as a dark horse.

Even if the obesity pipeline doesn't turn out to be their golden ticket, Amgen's strategic positioning could still deliver solid long-term value.

But, and here’s the kicker, if MariTide and its potential combo treatments hit their stride as hoped, Amgen could sprint ahead in this fast-paced market race — not just in obesity but in those juicy, adjacent niches too. This could spark some serious value creation that current forecasts haven't even begun to factor in.

So, while the market’s getting its gears grinding, Amgen might just surprise us all. I say keep this stock on your watchlist.