Amgen slips on eczema drug results

Amgen stock dipped early after producing results from two recent drug studies.
A drug that treats atopic dermatitis appeared less useful compared with Sanofi's current drug.
Dow Jones sinks despite US housing stats showing better than expected New Home Sales.
Positive results also followed Phase 3 trial of Uplizna.

Clay Webster FXStreet

Amgen (AMGN) stock slid more than 4.5% at the start of Wednesday trading after the pharmaceutical giant reported the results of several drug trials.

The Dow Jones Industrial Average (DJIA), of which Amgen is a member, fell 0.4% against a backdrop of an improving NASDAQ. The DJIA has been wobbly all week.

US housing data early in the session showed that mortgage applications were rising. Additionally, New Home Sales in the US fell 4.7% MoM but were not as bad as expected.

Amgen stock news

Amgen released results from two studies late Tuesday after the market close, both of which proved positive.

First, its Phase 3 trial for Uplizna, a drug that treats IgG4-type diseases, showed an 87% reduction in IgG4-RD flare-ups. It also met all three secondary endpoints. Uplizna has been approved for treating neuromyelitis optica spectrum disorder.

Second, its Phase 3 study of rocatinlimab, which treats atopic dermatitis, was statistically significant. Following 24 weeks of treatment, nearly 33% of patients saw at least a 75% improvement in the severity of eczema.

However, this last study was the negative issue for investors. The Sanofi-created and Regeneron-marketed Dupixent drug, which is focused on the same use case, achieved figures of 51% and 44% during its two Phase 3 studies compared with Amgen’s 33%. Hence, Amgen’s drug works but not quite as well as that of its competitors.

In reporting by industry website Fierce Biotech, Amgen Executive Vice President Murdo Gordon was not dissuaded. Gordon said that more than one drug was needed to meet the needs of patients in the atopic dermatitis market and that Amgen’s data suggested that doctors often switch prescriptions early on in treatment. Rocatinlimab’s use of a different mechanism for treatment might also persuade some physicians, according to Gordon.

Amgen stock forecast

Amgen stock is up 9.5% year to date and 24% over the past year despite dropping to $315 on Wednesday. Seeing as the pharma stock slid easily below the 100-day Simple Moving Average (SMA) on Wednesday, it could be foolish to think that the 200-day SMA might hold, which is now near $302.

If it fails to hold, then traders will look to $296, which held up earlier this summer. Below there is resistance turned support at $260, which was treated with respect throughout 2023. However, a break back above $320 would put an end to bearish sentiment.

AMGN daily stock chart

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Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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