Glucagon-like peptide 1 (GLP-1) weight-loss drugs such as Zepbound and Wegovy are growing in popularity. And that has made the companies who make those drugs, Eli Lilly and Novo Nordisk, hot investments over the past few years.
But there could soon be many more options out there for patients. Given the potential for a weight-loss drug to generate tens of billions of dollars in revenue for a company, there's bound to be a lot of interest in the space, and many healthcare companies are vying to bring comparable products to market.
One particularly promising GLP-1 drug that investors should keep an eye out for is MariTide. Here's why it could put a serious dent in the future demand for Zepbound and Wegovy.
Why MariTide could have multiple advantages over other GLP-1 drugs
MariTide, also known as AMG 133, is a GLP-1 injectable treatment that pharmaceutical company Amgen (AMGN 1.61%) has been developing. The results have been incredibly encouraging, as it has been shown to reduce a person's body weight by up to 15%, which is comparable to Wegovy's results. Zepbound has helped people lose more than 20% in clinical trials.
But just the weight loss percentage may not be of the utmost importance to patients. With MariTide, doses were only administered on a monthly basis, which is unlike Wegovy and Zepbound, which require weekly injections. And in some cases, patients took MariTide even less frequently. By requiring fewer injections that could make it more attractive for patients, and it may end up costing less.
Another potentially game-changing advantage for the drug is that patients have also been keeping the weight off after they stopped taking MariTide. Gaining weight after stopping treatment has been one of the biggest problems for people taking other GLP-1 drugs.
The drug still has a long way to go
Zepbound and Wegovy are already approved drugs for weight loss in the U.S. market. MariTide, however, is only in phase 2 trials. And the data the results were based on were from a phase 1 trial. As MariTide progresses into later trials, they will become larger, cover longer periods, and give investors more information about whether the drug is in fact the real deal.
Success in early-stage trials doesn't mean MariTide will obtain approval or that it will even end up progressing to phase 3. The results are promising, and it definitely makes it a drug worth keeping an eye on. But it would be premature to assume that MariTide will be a top product for Amgen just yet, or that approval is imminent. It could still take multiple years for the drug to progress through clinical trials successfully, gain approval (assuming that it does), and start generating revenue for Amgen.
Should you invest in Amgen stock today?
Year to date, shares of Amgen are up a relatively modest 8%. While the healthcare stock has been climbing lately, thanks in part to the news relating to MariTide, it isn't taking off just yet. At 16 times its expected future profits (based on analyst estimates), Amgen is potentially a cheap stock to buy right now. And it may look like a downright steal if MariTide continues to demonstrate strong results in clinical trials.
At a modest valuation, Amgen could make for an intriguing investment right now. Even if MariTide doesn't end up obtaining approval, Amgen is still a top healthcare stock, and it pays a dividend, which yields 2.9%; there are multiple reasons to invest in it. It offers investors a safer way to invest in a potential GLP-1 drugmaker, rather than buying shares of a much smaller healthcare company with a less diverse and financially secure business. And its returns could be far greater than investing in Eli Lilly or Novo Nordisk, which are already among the most valuable healthcare stocks in the world.
