Weight loss drugmakers in spotlight as White House proposes coverage

The Biden-Harris Administration has proposed a new rule to expand coverage of anti-obesity medications for Americans with Medicare and Medicaid, sending the shares of Wegovy maker Novo Nordisk (NVO) and Zepbound maker Eli Lilly (LLY) higher on Tuesday.

Meanwhile, Amgen (AMGN) reported data at 52 weeks in a Phase 2 study with MariTide, an investigational antibody peptide conjugate subcutaneously administered monthly or less frequently for people living with obesity. Deutsche Bank views the data as underwhelming, while Leerink says the only differentiation “seems to be dosing frequency.”

WEIGHT LOSS DRUG COVERAGE: The Biden-Harris Administration proposed a new rule to expand coverage of anti-obesity medications for Americans with Medicare and Medicaid. An estimated 42% of the U.S. population has obesity, which is now widely recognized as a chronic disease, with increased risk of all-cause mortality and multiple related comorbidities such as diabetes, cardiovascular disease, stroke, some cancers, and more, the Administration said in a statement.

“Over the past few years, there have been major scientific advancements in the treatment of obesity, with the introduction of new life-saving drugs. These anti-obesity medications can help prevent the development of Type 2 diabetes. Furthermore, these drugs reduce deaths and sickness from heart attack and other cardiovascular outcomes by up to 20%. But for too many Americans, these critical treatments are too expensive and therefore out of reach. Without insurance coverage, these drugs can cost someone as much as $1,000 a month,” it added. Currently, Medicare and Medicaid cover the use of anti-obesity medications for certain conditions, like diabetes. The new proposal would expand access to these medications for obesity, the White House says. The drugs covered would include Wegovy from Novo Nordisk and Zepbound from Eli Lilly.

NEW DATA: Amgen announced positive data at 52 weeks in a double-blind, dose-ranging Phase 2 study with MariTide – maridebart cafraglutide, formerly AMG 133 – an investigational antibody peptide conjugate subcutaneously administered monthly or less frequently. In people living with obesity or overweight without Type 2 diabetes, MariTide demonstrated up to 20% average weight loss at week 52 without a weight loss plateau, indicating the potential for further weight loss beyond 52 weeks. People living with obesity or overweight and Type 2 diabetes, who typically lose less weight on GLP-1 therapies, achieved up to 17% average weight loss, also without a weight loss plateau, and lowered their average hemoglobin A1C by up to 2.2% at week 52.

A weight loss plateau was not observed, again indicating the potential for further weight loss beyond 52 weeks. MariTide also demonstrated robust and clinically meaningful improvements in cardiometabolic parameters. There were no significant increases in free fatty acids. There was no association between the administration of MariTide and bone mineral density changes. The most common adverse events in the Phase 2 study were gastrointestinal related, including nausea, vomiting and constipation. The incidence of nausea and vomiting was substantially reduced with dose escalation. Data from this Phase 2 study will be presented at a future medical congress and submitted for publication. The ongoing Part 2 of the Phase 2 study is investigating MariTide beyond 52 weeks to evaluate further weight loss with continued treatment, weight maintenance through less frequent or lower dosing and durability of weight loss after discontinuation of MariTide.

DATA UNDERWHELMS: Deutsche Bank says Amgen’s MariTide’s Phase 2 press release “underwhelms” with 20% weight loss from Cohort A and 17% weight loss from Cohort B at 52-weeks, with it being unclear if these are placebo adjusted. MariTide’s weight loss appears to miss the Street’s bogey of 25% weight loss and will weigh down Amgen shares, the firm tells investors in a research note. Amgen noted no weight loss plateau was seen at 52 weeks, which is encouraging, but may not be viewed as differentiated to next generation assets such as Eli Lilly’s Triple G or Novo Nordisk’s CagriSema, adds Deutsche Bank. The firm thinks Lilly shares should be up slightly on MariTide’s Phase 2 weight loss figures as Novo’s REDEFINE1 readout “still needs to wash out.” Deutsche has a Hold rating on Amgen with a $305 price target.

Leerink notes that Amgen’s Phase 2 MariTide showed “up to 20% average weight loss at 52 weeks” in nondiabetic obese/overweight patients, which is roughly on par with the highest, 15 mg, dose of Eli Lilly’s Zepbound at 52 weeks in the Phase 3 SURMOUNT-1 trial in nondiabetic obese/overweight patients. MariTide was said to be administered at “monthly or less frequent dosing.” The firm highlights that MariTide showed “no significant increases in free fatty acids,” whereas free fatty acids decreased by 7.5% with pooled groups of tirzepatide in the Phase 3 SURMOUNT-1 trial. Notably, the MariTide PR stated that “there was no association between the administration of MariTide and bone mineral density changes.” Leerink has a Market Perform rating on Amgen.

PRICE ACTION: In morning trading, shares of Amgen have dropped over 12% to $258.03, while Eli Lilly and Novo Nordisk’ have risen about 5% and 1% to $788.44 and $105.84, respectively.