There's probably a big enough pie here for everyone to get a slice.
Eli Lilly and Novo Nordisk are, so far, the kings of the weight-loss gold rush. Thanks to their medicines, Zepbound and Wegovy, billions in new revenue inflows are assured in the near term.
But those two juggernauts aren't the only competitors looking to get a slice of the action -- they're just the first. Three aspiring contenders are raring to go, and they might even be able to claim the crown one day. Let's take a look at each to see if any of them are a good fit for your portfolio.
1. Amgen
Among other things, Amgen (AMGN -0.02%) is known for its collection of antibody therapies, many of which are indicated for treating various cancers. Now, it's putting that expertise with biologics to use with its unique program targeting obesity.
Amgen's candidate, MariTide, is a noteworthy contender because early-stage clinical trial data suggest that it can cause weight loss far more rapidly than Eli Lilly and Novo Nordisk's entrants. Whereas Zepbound and Wegovy both needed a full year of treatment to help patients shed as much as 21% of their body weight, in its phase 1 study the patients taking MariTide experienced a loss of 14.5% of their mass in just under three months.
Now, MariTide is in phase 2 testing, with management already setting the stage for a quick transition to phase 3 trials as soon as possible. Data from the phase 2 study is due later this year. Expect the stock to get a healthy bump if the mid-stage results look as favorable as the earlier ones, and don't be afraid to invest in advance of the data readout.
Amgen is an established big pharma company with a massive pipeline and many avenues for growth outside of obesity, so a future win in that segment would just be the icing on the cake.
2. AstraZeneca
AstraZeneca's (AZN 1.30%) obesity drug pipeline has three programs, all of which are in phase 1 clinical trials. But investing in the weight-loss and cardiometabolic therapies space is one of the company's priorities, per its strategic plan with a completion deadline of 2030. So, it is probable that over the next year or so it will spin up a few more programs or acquire them from other biopharmas.
Aside from its clinical programs, in late May AstraZeneca committed to paying up to $80 million in milestone payments and royalties to a biotech called SixPeaks Bio in exchange for the right to acquire it if its obesity candidate in pre-clinical testing ever gets close to being approved to entering the clinic with human patients.
The advantage of SixPeaks' approach is that it may result in less muscle mass loss than the therapies produced by Eli Lilly and Novo Nordisk. For now, those benefits are not proven, and the company hasn't released much in the way of data from its clinical-stage programs.
Therefore, the stock is not yet worth buying on the basis of the company's obesity drug development activities alone although there are still many other reasons, like its ambitious plan for 2030, that make it an attractive purchase.
3. Viking Therapeutics
Viking Therapeutics (VKTX -9.70%) is a biotech rather than a pharma company, so it's much smaller than Amgen and AstraZeneca, and it's still working on getting its first medicine approved for sale.
On that front, its lead candidate, VK2735, just concluded its phase 2 clinical trials, and it has the makings of a winner. After just 13 weeks of treatment, patients in the trial who got VK2735 instead of a placebo lost 14.7% of their body weight, whereas the patients on the placebo lost only 1.6%. That puts its efficacy at roughly the same as Amgen's candidate, which is to say it also has a real shot at being proven to be far more effective than Wegovy or Zepbound.
Viking additionally has another clinical-stage program testing VK2735 in a pill formation rather than as an injection. The data available so far indicate that it's close to being as effective as the injected version, though an upcoming phase 2 trial is still needed to make that comparison with confidence.
Overall, Viking is a significantly riskier pick than the other two businesses I've discussed so far. It doesn't have any revenue to keep it afloat although its hoard of cash, equivalents, and short-term investments worth $963 million will probably be sufficient for the near term. Based on its publications to date, it's worth buying, just recognize that if future data refute the past findings, it'll be a disaster for the stock.
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Amgen, AstraZeneca Plc, and Novo Nordisk. The Motley Fool has a disclosure policy.
