This GLP-1 Stock's Bad News Could Be a Big Win for Eli Lilly and Novo Nordisk

There are a lot of healthcare companies that are in GLP-1 weight loss drugs

Today, the leaders in that space are Eli Lilly and Novo Nordisk

But it could get much more crowded in the future

It's a mammoth growth opportunity that can jump-start a company's sales and fits

Before drugs are apved, investors can gain insights into just how mising a GLP-1 drug is from the results of clinical trials

One drug I've been keeping a close eye on, MariTide, comes from Amgen (AMGN -1

Un the current ducts on the market which require weekly injections, Amgen's MariTide is taken monthly, and it has the potential to be a much more attractive option for patients

But its recent results were a concern

And they could end up giving investors more of a reason to invest in Eli Lilly and Novo Nordisk instead

Image source: Getty Images

MariTide's big blem: side effects Prior to these recent clinical trial results, I was optimistic that MariTide could make Amgen an underrated stock to own

Patients having just a monthly injection which might yield similar weight losses to that of drugs currently on the market would seem it should be able to win over patients and doctors

The company will ensure patients in the Phase 3 trial, which is currently, will increase their doses in an effort to minimize side effects

How high that discontinuation rate ends up being in a larger trial could be critical for the stock

Why this should raise concerns for investors When it comes to GLP-1 treatments, these are medications that patients need to be on forever

The biggest downside with these treatments is that someone who stops taking them can end up gaining back the weight that they lost -- perhaps even more

If someone can't tolerate the treatment then there will be the inevitable temptation to select a different option, one where the side effects may not be as troublesome, even if it means more frequent injections or slightly lower weight loss

While a lot of the focus is on sheer weight gain percentage, I think the biggest winners in the GLP-1 race will be the companies whose treatments are best tolerated

MariTide isn't apved, but even if it is, if it doesn't shake concerns related to side effects, then there may not be strong demand for it

Has Amgen become a bad buy on this news

Amgen was looking a potentially underrated growth stock to buy given the potential for MariTide

It still has a good and MariTide may recover, but based on this recent data, I'd take a wait-and-see apach with the stock for the time being

The GLP-1 opportunities are what made it a compelling investment, but now, amid the question marks around MariTide, the bullish case just isn't that strong anymore

If you're looking for a top healthcare stock to buy that has much more upside in GLP-1, then going with Eli Lilly or Novo Nordisk can make much more sense at this stage

They have solid, ven ducts that are already apved in the space, and their prices could end up rallying on this news

David Jagielski has positions in Novo Nordisk

The Motley Fool has positions in and recommends Amgen

The Motley Fool recommends Novo Nordisk

The Motley Fool has a disclosure policy.