Why is Amgen stock sliding today?

Amgen's stock experienced a significant 4.7% decline in early trading after Novartis's Phase III cardiovascular trial for its Lp(a)-lowering drug, pelacarsen, showed no reduction in heart disease risk. This news has shaken investor confidence in the entire class of drugs targeting lipoprotein(a), a lipid particle associated with increased heart disease risk.

The failure of pelacarsen is particularly concerning for Amgen, as they are developing olpasiran, an investigational therapy meant to lower Lp(a) levels, which is currently being tested in the Phase III OCEAN(a)-Outcomes study. Analysts at BMO Capital have downgraded Amgen from 'Outperform' to 'Market Perform' and set a $450 price target, citing the stock's rapid 34% year-to-date gain, which surpassed both the S&P 500 and the drug sector.

They also highlighted the risk of loss-of-exclusivity as a factor that needs further evaluation. While the Novartis setback raises doubts for other experimental Lp(a) drugs from Amgen and Eli Lilly, experts note that the failure does not disprove the scientific concept of targeting this form of harmful cholesterol. The broader U.S. equity market is also experiencing a slight downturn, with the S&P 500 down 0.3% and the Dow Jones down 0.8%.

Consequently, Amgen's shares are currently trading at $416.88 in pre-market, significantly below its 52-week high of $447.03 achieved just weeks ago. The company's OCEAN(a)-Outcomes trial results will be closely watched by investors to determine if lowering Lp(a) levels genuinely leads to a reduction in cardiovascular events.