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Amgen is scrapping an experimental weight loss pill but moving forward with an injection.
Amgen will release initial data from a mid-stage study on its injectable drug later this year, and the company is “very pleased” with the results so far.
The company has tried to take a different approach to obesity treatment than other drugmakers.

The Amgen logo is displayed outside Amgen headquarters in Thousand Oaks, California, on May 17, 2023.
Mario Tama | Getty Images

Amgen on Thursday said it will stop developing its experimental weight loss pill and instead move forward with its injectable drug and other products in development for obesity.
Amgen is among several drugmakers racing to join the red-hot weight loss drug space dominated by Novo Nordisk and Eli Lilly, which some analysts say could be worth $100 billion by the end of the decade. But the company has other opportunities to capture a slice of the market.

“Given the profile we’ve seen with [the oral drug], we will not pursue further development. Instead, in obesity, we’re differentially investing in MariTide and a number of preclinical assets,” Jay Bradner, Amgen’s chief scientific officer, said during an earnings call Thursday.
Amgen is developing an injectable obesity treatment called MariTide, which is in an ongoing midstage trial in obese or overweight adults without diabetes. The company will release initial data from that study later this year, and Bradner said Amgen is “very pleased” with the results so far.The company said it is working with regulators to plan a late-stage trial for the treatment. Amgen said Thursday it is planning a stage two trial on the drug in diabetes treatment as well.
Amgen shares rose more than 10% in extended trading Thursday following the commentary on MariTide.
Amgen also has other drugs in development for weight management. 
The drugmaker’s oral drug, called AMG-786, is the second weight loss pill to be discontinued over the past year.

Pfizer in December scrapped a twice-daily version of its obesity pill, danuglipron, after patients had a difficult time tolerating the drug in a midstage trial. The company is now developing a once-daily version of that drug.
Investors are laser-focused on Amgen’s pipeline of experimental weight loss treatments. Amgen hopes to stand out among the crowded field of potential players with a different approach. 
The company’s experimental injection helps people lose weight differently from the existing injectable drugs. Much similar to Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, one part of Amgen’s treatment activates a gut hormone receptor called GLP-1 to help regulate a person’s appetite. 
But while Zepbound activates a second hormone receptor called GIP, Amgen’s drug blocks it. Wegovy does not target GIP, which suppresses appetite like GLP-1, but may also improve how the body breaks down sugar and fat.
Amgen’s injectable treatment also appears to help patients keep weight off after they stop taking it based on some clinical trial data. The drugmaker is also testing its drug to be taken once a month or even less frequently, which could offer more convenience than the weekly medicines on the market. 
Patients given the highest dose of Amgen’s MariTide — 420 milligrams — every month lost 14.5% of their body weight on average in just 12 weeks, according to data from the phase one trial published in February in the journal Nature Metabolism. 

Amgen’s first-quarter results

Also on Thursday, Amgen reported first-quarter revenue and adjusted earnings that topped Wall Street’s expectations, partly due to products from the recently acquired Horizon Therapeutics. 
Here is what Amgen reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $3.96 vs. $3.87 expected
Revenue: $7.45 billion vs. $7.44 billion expected

Amgen posted a net loss of $113 million, or 21 cents per share. That compares to a net income of $2.84 billion, or $5.28 per share, for the year-earlier period.
Excluding certain items, the company reported earnings of $3.96 per share. 
Amgen booked $7.45 billion in revenue for the first quarter, up 22% from the same period a year ago. 
That includes $914 million from Horizon Therapeutics products, including thyroid eye disease treatment Tepezza. 
Excluding drugs from Horizon Therapeutics, Amgen said its product sales grew 6% from the year-earlier period. Ten products delivered double-digit volume growth during the first quarter, including cardiovascular drug Repatha, severe asthma treatment Tezspire and Blincyto, a therapy for a certain blood cancer.
Amgen slightly narrowed its full-year guidance up from the bottom on Thursday as well. 
The company expects 2024 revenue of $32.5 billion to $33.8 billion. That compares to a previous guidance of $32.4 billion to $33.8 billion. 
Amgen expects a full-year adjusted profit of $19 to $20.20 per share. That compares to a previous guidance of $18.90 to $20.30 per share. 
Analysts surveyed by LSEG expect full-year revenue of $32.95 billion and adjusted profit of $19.48 per share. 

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Peloton announced Thursday that CEO Barry McCarthy will be stepping down just over two years after he took over from founder John Foley.
Along with the CEO change, the company is laying off 15% of its staff, or about 400 employees, to bring spending in line with revenue.
Peloton also announced fiscal third-quarter results that fell short of Wall Street’s expectations on the top and bottom line.

Barry McCarthy, president and CEO of Peloton Interactive, walks to a morning session at the Allen & Company Sun Valley Conference on July 06, 2022 in Sun Valley, Idaho.
Kevin Dietsch | Getty Images

Peloton announced Thursday that CEO Barry McCarthy will be stepping down and the company will lay off 15% of its staff because it “simply had no other way to bring its spending in line with its revenue.”
McCarthy, a former Spotify and Netflix executive, will become a strategic advisor to Peloton through the end of the year while Karen Boone, the company’s chairperson, and director Chris Bruzzo will serve as interim co-CEOs. Boone most recently served as the CFO of Restoration Hardware while Bruzzo was a longtime executive at Electronic Arts. Peloton is seeking a permanent CEO.

The company also announced a broad restructuring plan that will see its global headcount cut by 15%, or about 400 employees. It plans to continue to close retail showrooms and make changes to its international sales plan.
The moves are designed to realign Peloton’s cost structure with the current size of its business, it said in a news release. It’s expected to reduce annual run-rate expenses by more than $200 million by the end of fiscal 2025. About half of those savings are going to come from payroll reductions, while the rest will come from lower marketing spending, a reduced retail store footprint, and reduced IT and software spending, said finance chief Liz Coddington.
The departments hit the hardest from the restructuring will be Peloton’s research and development, marketing and international teams, Coddington said.
“This restructuring will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimizations to marketing efforts to scale the business,” the company said.
Peloton’s shares surged more than 12% in premarket trading but opened lower after the company’s conference call with Wall Street analysts concluded. Shares closed about 3% lower.

Peloton board ready for its next CEO

McCarthy took the helm of Peloton in February 2022 from founder John Foley and has spent the last two years restructuring the business and working to get it back to growth.
As soon as he took over, he implemented mass layoffs to right size Peloton’s cost structure, closed some of the company’s splashy showrooms and enacted new strategies designed to grow membership. He overhauled Peloton’s executive team, oversaw its rebrand and created new revenue drivers like the company’s rental program.
The last round of cuts, affecting 500 employees, was announced in October 2022. McCarthy later said the company’s restructuring was “complete” and it was instead pivoting to “growth.” 
“We are done now,” McCarthy had said in November 2022 of the layoffs. “There are no more heads to be taken out of the business.”
Contrary to Peloton’s founder, McCarthy redirected Peloton’s attention to its app as a means to capture members who may not be able to afford the company’s pricey bikes or treadmills but could be interested in taking its digital classes.
In a letter to staff, McCarthy said the company now needed to implement layoffs again because it wouldn’t be able to generate sustainable free cash flow with its current cost structure. Peloton hasn’t turned a profit since December 2020 and it can only burn cash for so long when it has more than $1 billion in debt on its balance sheet.
“Achieving positive [free cash flow] makes Peloton a more attractive borrower, which is important as the company turns its attention to the necessary task of successfully refinancing its debt,” McCarthy said in the memo.
In a letter to shareholders, the company said it is “mindful” of the timing of its debt maturities, which include convertible notes and a term loan. It said it is working closely with its lenders at JPMorgan and Goldman Sachs on a “refinancing strategy.”
“Overall, our refinancing goals are to deleverage and extend maturities at a reasonable blended cost of capital,” the company said. “We are encouraged by the support and inbound interest from our existing lenders and investors and we look forward to sharing more about this topic.”
In a news release, Boone thanked McCarthy for his contributions.
“Barry joined Peloton during an incredibly challenging time for the business. During his tenure, he laid the foundation for scalable growth by steadily rearchitecting the cost structure of the business to create stability and to reach the important milestone of achieving positive free cash flow,” Boone said.
“With a strong leadership team in place and the Company now on solid footing, the Board has decided that now is an appropriate time to search for the next CEO of Peloton.”
During a conference call with analysts, Boone said Peloton’s board is looking for a leader who can “architect and lead the next phase of growth for the company.”

Disappointing earnings, lowered outlook

Also on Thursday, Peloton announced its fiscal third-quarter results and fell short of Wall Street’s expectations on the top and bottom line. Here’s how the connected fitness company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Loss per share: 45 cents vs. a loss of 37 cents expected
Revenue: $718 million vs. $723 million expected

The company’s reported net loss for the three-month period that ended March 31 was $167.3 million, or 45 cents per share, compared with a loss of $275.9 million, or 79 cents per share, a year earlier. 
Sales dropped to $718 million, down about 4% from $748.9 million a year earlier. 
Peloton has tried a little bit of everything to get the company back to sales growth. It removed the free membership option from its fitness app, expanded its corporate wellness offerings and partnered with mega-brands like Lululemon to grow membership, but none of the initiatives have been enough to grow sales.
For the ninth quarter in a row, Peloton’s revenue fell during its fiscal third quarter, when compared with the year-ago period. It hasn’t seen sales grow compared with the year ago quarter since December 2021, when the company’s stationary bikes were still in high demand and many hadn’t yet returned to gyms amid the Covid-19 pandemic.
The business is continuing to bleed money and hasn’t turned a net profit since December 2020. 
For its current fiscal year, Peloton lowered its outlook for paid connected fitness subscriptions, app subscriptions and revenue. It reduced its connected fitness subscription outlook by 30,000 members, or 1%, to 2.97 million as it looks toward its current quarter, which is typically its toughest because people tend to work out less in the spring and summer months. 
“Our Paid Connected Fitness Subscription guidance reflects an updated outlook for hardware sales based on current demand trends and expectations for seasonally lower demand,” the company said. 
Peloton now expects app subscriptions to drop by 150,000, or 19%, to 605,000. 
“We are maintaining our disciplined approach to App media spend as we evaluate our App tiers, pricing, and refine the Paid App subscription acquisition funnel,” the company said.
As a result of expected downturns in its subscription sales, Peloton now projects full-year revenue to come in at $2.69 billion, a reduction of about $25 million, or 1%. That’s below expectations of $2.71 billion, according to LSEG.
However, the company raised its full-year outlook for gross margin and adjusted EBITDA. It now expects total gross margin to grow by 50 basis points, to 44.5%, and adjusted EBITDA to grow by $37 million, to negative $13 million. 
“This increase is largely driven by outperformance from Q3, combined with lower media spend and cost reductions from today’s announced restructuring plan,” the company said.

The quest to reach positive free cash flow

Last February, McCarthy set a goal of returning Peloton to revenue growth within a year. When it failed to reach that milestone, McCarthy pushed it back and said he now expects the company to be back to growth in June, at the end of the current fiscal year. 
McCarthy had also expected Peloton to reach positive free cash flow by June — a goal the company said it reached early during its third quarter. It’s the first time Peloton has hit that mark in 13 quarters. In a letter to shareholders, Peloton said it generated $8.6 million in free cash flow but it’s unclear how sustainable that number is.
Last month, CNBC reported that Peloton hadn’t been paying its vendors on time, which could temporarily pad its balance sheet. Data from business intelligence firm Creditsafe showed that Peloton’s late payments to vendors spiked in December and again in February after improving in January.
The company didn’t provide specific guidance on what investors can expect with free cash flow in the quarters ahead but said it does expect to “deliver modest positive free cash flow” in its current quarter and in fiscal 2025.
“While we firmly intend to return the business to growth, with today’s announced cost reductions, we’re lowering our cost base and we see a path to positive free cash flow without requiring a significant improvement in growth to get there,” Coddington said on the conference call. “I also want to clarify that we have carefully reviewed these cost measures to make sure that we do still have the capability to invest in innovation so that the business can grow profitably.”
Part of the reason why Peloton had failed to reach positive free cash flow is because it’s simply not selling enough of its hardware, which is costly to make and has become less popular since the Covid-19 pandemic ended and people returned to gyms.
“Looking at the numbers in more detail, the biggest problem lies in the part of the business where Peloton first made its name: exercise equipment. Revenue for connected fitness products plummeted by 13.6% over last year in a sign that consumers are still cooling on equipment that, while aesthetically and technically pleasing, is very expensive,” GlobalData managing director Neil Saunders said in a note. “A lot of people who want Peloton equipment already have it and are not likely to upgrade anytime soon; the balance of the market is either not interested or needs a lot of persuasion to buy into Peloton.”

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Apollo and Sony have sent a letter to the Paramount board expressing formal interest in doing a $26 billion takeover of the company.
A Skydance consortium could hear from a Paramount special committee on a recommendation of next steps as soon as Thursday, according to people familiar with the matter.
Some Paramount investors have clamored for the board to engage with Apollo and Sony rather than take the Skydance deal, because all common shareholders would get a premium for their shares.

Shari Redstone, non-executive chairwoman of Paramount Global, attends the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, July 11, 2023.
David A. Grogan | CNBC

Sony Pictures and private equity firm Apollo Global Management have sent a letter to the Paramount Global board expressing interest in acquiring the company for about $26 billion, according to people familiar with the matter.
The expression of formal interest comes as David Ellison’s Skydance Media, backed by private equity firms RedBird Capital and KKR, awaits word from Paramount’s special committee on whether the panel will recommend its bid to acquire the company to controlling shareholder Shari Redstone.

Skydance Media hasn’t heard anything from the special committee yet, though it expects to find out the special committee’s recommendations on next moves as early as Thursday, according to people familiar with the matter. Paramount’s panel could recommend approving Skydance’s offer or rejecting it, or it could come back to the Skydance consortium with alternatives or changes.
Spokespeople for Paramount, Redstone’s National Amusements, the special committee and Skydance declined to comment. Sony and Apollo did not immediately respond to requests for comment.

Paramount’s options

If the special committee wants to continue negotiating with Skydance, or Redstone wants more time to consider her options while still talking to Ellison’s company, the sides could extend an exclusivity window that ends Friday. It’s also possible Skydance could walk away from the deal, which it has been negotiating on for months.
If Skydance walks away, Redstone could turn her attention to negotiating a deal with Sony and Apollo, which would give all common shareholders a premium payout on their shares.
Paramount Global shares jumped more than 12% on the news that Sony and Apollo submitted a letter formalizing its interest, earlier reported by The New York Times and The Wall Street Journal.

Redstone initially rejected an offer by Apollo in favor of exclusive talks with Skydance. Redstone still prefers a deal that would keep Paramount together, as Skydance’s offer would, a person familiar with the matter said. A private equity firm would likely tear the company apart through a series of divestitures to extract value.
The Sony-Apollo offer would make the former the majority shareholder and the latter a minority holder, according to a person familiar with the letter. That could also assuage Redstone’s fears that a new buyer could break apart the company, because Sony is another large Hollywood player and the owner of Sony Pictures.
A $26 billion offer for Paramount Global values the company higher than the company’s current $22 billion enterprise value.
Still, the special committee would likely want to review details on financing and get assurances that there are no regulatory challenges in merging with Sony, a non-U.S. entity. To do this, the special committee would have to inform the Skydance consortium that it wants to end its exclusive talks, which would likely drive Skydance away as a bidder, according to people familiar with the matter.
That move would be applauded by a number of Class B shareholders, including Gamco, Matrix Asset Advisors and Aspen Sky Trust, who have all publicly expressed dismay about the Skydance transaction. Skydance’s “best and final” offer included merging its entertainment assets with Paramount, raising $3 billion to buy out common shareholders at about a 30% premium on an unaffected $11 per share price, and paying Redstone nearly $2 billion for her controlling stake.
Redstone could also argue she’s more comfortable with pushing forward at Paramount Global without a sale. Earlier this week, the board removed Bob Bakish as the company’s CEO. Installing a new CEO and giving investors a new plan forward would be essential to assuage a restless common shareholder base, who would likely argue the Apollo-Sony bid, if real, is in the best interest of shareholders.

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Wayfair’s sales fell in the first quarter, but the furniture retailer narrowed its losses by more than $100 million after cutting 13% of its staff.
The home goods company beat Wall Street’s expectations on the top and bottom lines and also saw active customers grow nearly 3% compared with the year-ago period. 
Like some of its other digitally native peers, Wayfair has implemented a series of layoffs after it saw sales boom during the pandemic and then shrink. 

The Wayfair app on a smartphone arranged in Hastings-on-Hudson, New York.
Tiffany Hagler-Geard | Bloomberg | Getty Images

Wayfair’s sales slid during its first quarter, but the online furniture retailer reduced its losses after cutting 13% of its workforce at the start of the year, the company announced Thursday. 
Wayfair beat Wall Street’s expectations on the top and bottom lines and saw active customers grow nearly 3% compared with the year-ago period. 

Here’s how Wayfair did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Loss per share: 32 cents adjusted vs. a loss of 44 cents expected
Revenue: $2.73 billion vs. $2.64 billion expected

Wayfair shares surged more than 17% in premarket trading Thursday.
The company’s reported net loss for the three-month period that ended March 31 was $248 million, or $2.06 per share, compared with a loss of $355 million, or $3.22 per share, a year earlier. Excluding one-time items, the company lost 32 cents per share.  
Sales fell to $2.73 billion, down more than 1% from $2.77 billion a year earlier. The steepest drop-off came from Wayfair’s international segment, where sales declined nearly 6% to $338 million compared with the year-ago period.
Despite the sales drop, co-founder and CEO Niraj Shah struck a positive note in a news release, saying the quarter “ended on an upswing.” 

“Shoppers are increasingly choosing Wayfair, with year-over-year active customer growth once again positive and accelerating compared to last quarter,” Shah said. 
“For the first time since pre-pandemic, we’re seeing suppliers introducing large groups of new products into their catalogs as they look to build momentum for the next stage of growth,” he added.
Like some of its other digitally native peers, Wayfair implemented a series of layoffs after it saw sales boom during the pandemic and then shrink when consumers started trading new couches and shelves for dinners out and travel after the Covid-19 pandemic ended. 
In January, it announced plans to cut 13% of its global workforce, or around 1,650 employees, so it could trim its structure and reduce costs after it went “overboard” with corporate hiring during the pandemic, the company said previously. The restructuring – the third Wayfair implemented since summer 2022 – was expected to save the company about $280 million, it said previously. 
Wayfair is still charting its path to profitability, but it reduced its losses by $107 million during the first quarter after implementing the latest round of job cuts. It also grew its active customer count at a time when the home goods sector faces pressure as high interest rates and a sluggish housing market weigh on sales. 
During the quarter, Wayfair’s active customers grew 2.8% to 22.3 million, slightly ahead of the 22.1 million that analysts had expected, according to StreetAccount.
On average, orders were valued at $285 during the quarter, compared with the $275.07 that analysts had expected, according to StreetAccount. While average orders were higher than Wall Street’s expectations, they fell slightly from the year-ago period, when the average order value was $287. That’s because of changes in Wayfair’s unit prices, which were inflated in 2021 and 2022 and started to come down last year, the company said.
Read the full earnings release here.

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Moderna posted a narrower-than-expected loss for the first quarter as the company’s cost-cutting efforts took hold and sales of its Covid vaccine topped estimates. 
The results come as Moderna inches closer to having another product on the market, which it badly needs as demand for its Covid shots plunges worldwide.
The company reiterated its full-year 2024 sales guidance of roughly $4 billion, which includes revenue from the expected launch of its RSV vaccine.

Nikos Pekiaridis | Nurphoto | Getty Images

Moderna on Thursday posted a narrower-than-expected loss for the first quarter as the company’s cost-cutting efforts took hold and sales of its Covid vaccine, its only commercially available product, topped estimates. 
The results come as Moderna inches closer to putting another product on the market, which it badly needs as demand for Covid shots plunges worldwide. The biotech company expects U.S. approval for its vaccine against respiratory syncytial virus on May 12. If cleared, that shot is expected to launch in the third quarter.

Here’s what Moderna reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Loss per share: $3.07 vs. loss of $3.58 expected
Revenue: $167 million vs. $97.5 million expected

“On the [operating expenses] side of a company, we’ve made great progress,” Moderna CEO Stéphane Bancel said of the cost cuts Thursday on CNBC’s “Squawk Box.” He added that the biotech company’s team “has done a great job resizing the company.”
Moderna booked first-quarter sales of $167 million, with revenue from its Covid shot dropping roughly 90% from the same period a year ago. The company reported $1.86 billion in revenue in the prior-year period.
Around $100 million came from the U.S., while $67 million came from international markets, primarily in Latin America, Moderna CFO Jamey Mock told CNBC in an interview. 
The company said the revenue decline came in part from an expected transition to a seasonal Covid vaccine market, where patients typically take their shots in the fall and winter.

Moderna posted a net loss of $1.18 billion, or $3.07 per share, for the first quarter. That compares with net income of $79 million, or 19 cents per share, reported for the year-ago period.
The company reiterated its full-year 2024 sales guidance of roughly $4 billion, which includes revenue from its RSV vaccine. Notably, Moderna expects only $300 million of those sales to come in during the first half of the year since the season for respiratory viruses is typically in the latter half of the year. 
Moderna has said it expects to return to sales growth in 2025 and to break even by 2026, with the launch of new products. 
For the first quarter, Mock said the company is “more encouraged by what we’re seeing from a productivity perspective” than the higher sales of its Covid vaccine. 
Cost of sales was $96 million for the first quarter, down 88% from the same period a year ago. That includes $30 million in write-downs of unused doses of the Covid vaccine and $27 million in charges related to the company’s efforts to scale back its manufacturing footprint, among other costs. 
Research and development expenses for the first quarter decreased by 6% to $1.1 billion compared with the same period in 2023. That decline was primarily due to fewer payments to partners in 2024 and lower clinical development and manufacturing expenses, including decreased spending on clinical trials for the company’s Covid, RSV and seasonal flu shots. 
Meanwhile, selling, general and administrative expenses for the period fell by 10% to $274 million compared with the first quarter of 2023. SG&A expenses usually include the costs of promoting, selling and delivering a company’s products and services.
The company said the reduction is in part due to its investments in “digital commercial capabilities” and increased focus on using AI technologies to streamline operations.

More CNBC health coverage

Last month, Moderna announced a partnership with artificial intelligence heavyweight OpenAI that aims to automate nearly every business process at the biotechnology company. 
Mock told CNBC that Moderna has been working with OpenAI for the past year. He added that 60% to 70% of the company currently uses an AI chatbot to do work. 
Moderna has so far managed to shore up investor sentiment about its path forward after Covid. Its shares are up more than 10% this year on increasing confidence around its pipeline and messenger RNA platform, which is the technology used in its Covid shot. 
The biotech company currently has 45 products in development, several of which are in late-stage trials. They include its combination shot targeting Covid and the flu, which could win approval as early as 2025.
Moderna is also developing a stand-alone flu shot, a personalized cancer vaccine with Merck and shots for latent viruses, among other products.
Correction: Moderna’s cost of sales was $96 million for the first quarter. An earlier version misstated the time period.

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