Amgen downgraded at Barclays citing rally fueled by weight loss therapy
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Amgen (NASDAQ:AMGN) dropped ~2% pre-market Monday after Barclays downgraded the biotech to Underweight from Equal Weight, citing the recent momentum in its shares driven mainly by the early-stage weight loss therapy AMG133.
Arguing that Amgen (AMGN) added more than $25B in market cap since Oct. 01 mainly on the back of hopes for AMG133 amid a sector-wide rally, the analysts led by Carter Gould name an upcoming data readout for the candidate âas a potentially higher impact catalyst.â
The update set for Nov. 07 at the American Heart Association Scientific Sessions will indicate how the drug can meet high expectations for efficacy and tolerability, according to the team.
Keeping the price target on Amgen (AMGN) at $234 per share, the analysts added that the event would also raise questions on how the company can advance the candidate amid competition from Eli Lilly (LLY) and Novartis (NVS), the established developers in the obesity market.
âIn short, we think AMGN shares could come under pressure after the recent gains on the back of this update,â Gould and the team wrote.
Early October, Amgen (AMGN) shares spiked after Morgan Stanley issued a bullish call on AMG133, arguing that the upcoming update would highlight the multi-billion-dollar potential of the experimental therapy.