Amgen Plunges 7% as 'Major Unknown Risk' Casts Shadow Over Obesity Drug Hopes
Shares of Amgen Inc. (AMGN) fell by 7% in premarket trading on Tuesday after the company disclosed a "major unknown risk" associated with its experimental monthly obesity shot, AMG 133.
The announcement sent shockwaves through the healthcare industry, as investors sold off shares in the biotechnology giant.
Amgen's stock price had been on a steady upward trajectory in recent months, buoyed by positive data from clinical trials of AMG 133. The drug, which is being developed in partnership with Japan's Kyowa Kirin, had shown promising results in reducing weight and improving blood sugar control in obese patients.
However, the company's rosy outlook was abruptly clouded on Monday when it announced that it had identified a "major unknown risk" associated with AMG 133. Amgen did not provide any details about the nature of the risk, but said that it was conducting further studies to assess its potential impact.
The news sent investors fleeing for the exits, as they worried that the risk could potentially derail the development of AMG 133 or even lead to its withdrawal from the market. The company's share price plummeted by 7% in premarket trading, wiping out billions of dollars in market value.
Analysts were quick to downgrade their ratings on Amgen's stock, with some cutting their price targets by as much as 20%. One analyst said that the "major unknown risk" had cast a "dark cloud" over Amgen's obesity drug hopes.
Amgen's disclosure of the risk is a reminder of the inherent uncertainty in drug development. Even drugs that show great promise in clinical trials can run into unexpected problems later on. Investors should be aware of these risks before investing in any biotech company.
The company said that it would provide an update on the situation as soon as it has more information. In the meantime, investors are likely to remain on edge, as they wait to learn more about the "major unknown risk" that has sent Amgen's stock price tumbling.
