Amgen Lifts Obesity Investment as Sales Beat Estimates

(Bloomberg) — Amgen Inc. reported second-quarter sales that beat Wall Street’s estimates and said it planned to increase capital spending on its obesity drug, though it didn’t provide any new data on the closely watched compound.
Revenue was $8.4 billion in the quarter, Amgen said in a statement, beating the $8.34 billion average estimate from analysts. The company continues to look for its next big product, with sales growth driven mainly by older medicines like the osteoporosis drug Prolia and Repatha to lower cholesterol.
Investors are awaiting information on its weight-loss drug, dubbed MariTide, which is taken less frequently than popular shots made by Eli Lilly & Co. and Novo Nordisk A/S. While Amgen didn’t provide a scientific update, it raised its expected capital spending for 2024 due in part to increased investment in MariTide, Chief Financial Officer Peter Griffith said.
“We’re looking every day for any white space that we need to eliminate to reduce the time to get MariTide to patients,” Griffith said in an interview. “We’re seeing what’s worked with Lilly and Novo and what hasn’t and we’re going to take advantage of that.”
Even passing comments about the experimental medicine can draw an outsized response. Investors boosted the company’s market capitalization by $17.7 billion on one day in May after Chief Executive Officer Robert Bradway said he was very encouraged by interim results from a mid-stage study.
The company’s shares fell 1.4% in late trading. They had risen more than 14% through Tuesday’s close, outpacing both the S&P 500 Index and the S&P 500 Health Care Index. 
Adjusted earnings were $4.97 a share in the second quarter, missing Wall Street’s average estimate by about 1 cent per share. That was in part due to higher operating expenses related to the company’s $27.8 billion purchase of Horizon Therapeutics last year.
Sales Forecast
Amgen boosted the lower end of its 2024 sales guidance by about $300 million, to a range of $32.8 billion to $33.8 billion. It expects capital expenditures for the full-year to be $1.3 billion, up from earlier guidance of $1.1 billion. 
The company’s weight-loss shot is what’s known as an antibody-drug conjugate, or ADC, a targeted treatment more commonly used in cancer. One part is an antibody that blocks the GIP receptor, while the other involves two peptides that mimic a gut hormone called GLP-1.
Initial data from the trial that’s underway is expected in late 2024, Amgen has said. The company currently is planning the definitive studies that would be conducted and submitted to regulators as part of the drug approval process. Griffith said the company will conduct research into obesity, diabetes and other obesity-related conditions.
In an early study, patients given a monthly injection of the drug lost as much as 14.5% of their body weight in 12 weeks. Side effects were mostly gastrointestinal-related, similar to those seen with other popular weight-loss shots.
Griffith said Amgen is continuing to invest in obesity and is looking at a number of early stage compounds that aren’t yet in clinical development, including pills and injectable drugs.
(Updates shares in sixth paragraph. An earlier version corrected the EPS miss in the seventh paragraph.)
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