Is GLP-1 Stock Amylyx Still a Buy After Skyrocketing 247%?
Key Points
Amylyx Pharmaceuticals raised $500 million to strengthen its balance sheet.
A potential 2027 drug launch could provide the company's next catalyst.
After a 247% rally, the stock's valuation remains the biggest concern.
- 10 stocks we like better than Amylyx Pharmaceuticals ›
Amylyx Pharmaceuticals (NASDAQ: AMLX) has skyrocketed more than 247% since the start of the year, turning what was once a beaten-down biotech stock into one of the hottest GLP-1 plays on the market. The question, of course, is whether it can go any higher.
Trial results hitting the mark
The catalyst for most of the stock's recent move is avexitide, Amylyx's experimental treatment for post-bariatric hypoglycemia (PBH).
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On Aug. 18, Amylyx reported that avexitide reduced serious hypoglycemic events by 55% compared with placebo in its phase 3 Lucidity trial. The study met its primary endpoint and all secondary endpoints, giving Amylyx the data it needs to move toward a submission to the Food and Drug Administration by the end of this year.
Image source: Getty Images.
This isn't trivial, as there are currently no FDA-approved treatments for PBH. Analysts from TD Cowen estimate that avexitide could generate $1.5 billion in peak U.S. sales. That's a pretty big number for a company that was left for dead after its drug for amyotrophic lateral sclerosis (ALS), Relyvrio, failed in 2024.
An extra $500 million raised
Amylyx also took advantage of the rally by raising $500 million through a stock offering priced at $35.50 per share. That created dilution, but it also gave the company significantly more financial firepower to prepare avexitide for a potential 2027 launch.
So would I buy Amylyx after a 247% run? Not aggressively -- the easy money has probably already been made. But with a successful phase 3 trial, no currently approved PBH treatment, and potential peak sales of $1.5 billion, Amylyx still could have a lot to offer shareholders.
That said, based on its closing price of $34.74 on Aug. 28, I'd be far more interested in the stock if it falls to around $28 to $30 per share. That would be a pullback of roughly 15% to 20%, providing a better margin of safety while still offering exposure to avexitide's potential $1.5 billion peak-sales opportunity.
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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