Amgen Inc (NASDAQ:AMGN, ETR:AMG) stock is poised to move higher in 2024 on a thesis its Phase II drug AMG133 for obesity will report positive data, according to Jefferies analysts.
In an update to clients, the analysts raised their price target on Amgen stock to $345 per share, from $310, on expectations of positive Phase II data for AMG133 in 2024 as well as preparations for a move to Phase III, which would start in 2025 and set up for a drug launch in 2027-28.
"We think the catalyst is positive interim analysis in the second half of 2024 is helping support a move to prepare and start Phase III and reporting out positive data by year end 2024 showing weight loss at least similar to tirzepatide (Zepbound)," the analysts wrote.
They added that the biggest bull case for the stock is that its $28 billion total revenue today increases to $50 billion plus if obesity drives $10-20 billion in sales, potentially doubling the stock price from a market cap of $150 billion to $300 billion in a best-case scenario.
Analysts at Jefferies, though, cautioned that there is minor "trading risk” in the first half of 2024 if oral AMG-786 disappoints in Phase I, but they see any dip in its stock price as a more attractive entry point.
Shares of Amgen rose 0.8% to $299.77 in midday trading on Wednesday and have gained 15% over the past year.