Amgen: MariTide's Progress, Reassessment Of The Horizon Acquisition

Amgen has significantly underperformed over the past two years, with minimal stock appreciation, primarily due to investor skepticism surrounding MariTide's potential in obesity and diabetes, and the Horizon acquisition failing to meet expectations as Tepezza's growth stalled. Despite these challenges, the author emphasizes MariTide's monthly dosing as a key advantage and anticipates improved tolerability with planned dose escalation in Phase 3 trials, positioning Amgen's overall product portfolio and pipeline for long-term value creation.

Analysis

Amgen (AMGN) has exhibited significant stock underperformance over the last two years, with a total return of only 13% since August 2023, driven by two primary factors. Firstly, there is persistent investor skepticism regarding the commercial prospects of its obesity and type 2 diabetes drug candidate, MariTide. Secondly, the acquisition of Horizon has underperformed, as its key drug Tepezza has not returned to a growth trajectory, with contributions from Uplizna and Krystexxa only partially offsetting this weakness. Despite these headwinds, a positive long-term outlook is maintained based on MariTide's potential competitive advantage of a monthly dosing schedule. Furthermore, the planned addition of a dose escalation protocol to the Phase 3 trial design is anticipated to improve the drug's tolerability profile, potentially mitigating a key market concern and unlocking future value from the company's broader product portfolio and pipeline.

Key Decisions for Investors

• Investors should closely monitor upcoming Phase 3 trial results for MariTide, focusing specifically on whether the new dose escalation protocol successfully improves the drug's tolerability, as this is a critical catalyst for the stock.
• It is crucial to track the quarterly sales performance of Tepezza to determine if the drug can resume growth, which would signal a turnaround in the value derived from the underperforming Horizon acquisition.
• Given the contrast between recent poor performance and potential long-term pipeline value, investors should assess if the current skepticism is already priced in, presenting a potential opportunity ahead of key clinical data readouts.