LLY Stock: Obesity Treatment Could Hit Market Next Year

Eli Lilli (LLY) said Thursday it plans to begin the process to ask the Food and Drug Administration to approve its much-anticipated obesity treatment later this year. LLY stock rose on the news.


The experimental drug, known as tirzepatide, is currently in a late-stage trial called Surmount-2. But the FDA gave Lilly a Fast Track designation for tirzepatide, which allowed it to send data ahead of those test results. Lilly expects results from Surmount-2 by the end of April and plans to complete the filing “shortly thereafter.”

This could launch the obesity treatment late next year and compete with Novo Nordisk’s Wegovy. The FDA approved Wegovy as a weight-loss drug in mid-2021. But Wegovy is currently facing supply shortages, giving Tirzepatide a little more room in an already broad market.

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In today’s trading, LLY shares are up 0.4% to 332.95.

LLY stock: Treating obesity in mind

Tirzepatide is already on the market as a diabetes drug called Mounjaro. It targets two hormones involved in blood sugar control. Similarly, Novo Nordisk sells Semaglutide as Ozempic to treat diabetes and Wegovy to treat obesity. Semaglutide targets a hormone.

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So far, results for tirzepatide in the treatment of obesity have been impressive, giving LLY stock a significant jump. In the Surmount-1 study, patients took tirzepatide for 72 weeks and lost between 16% and 22.5% of their body weight, depending on the dose. That translates to 35-52 pounds.

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Recently, an analyst said that Tirzepatide could generate $25 billion in annual sales. The drug was the first in its class to receive approval. But it did not have to face any advisory board and was approved in time for diabetes treatment.

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Mike Mason, President of Lilly Diabetes, notes that obesity affects nearly 100 million Americans and generates a significant number of healthcare costs. Obesity is linked to a number of health problems, including nonalcoholic steatohepatitis and heart failure.

LLY stock has risen steadily on hopes for Tirzepatide in the treatment of obesity. According to MarketSmith.com, shares briefly broke out of the flat base with a buy point of 335.43. In this case, the outbreak came down to hopes for his Alzheimer’s drug biogenic (BIIB) presented promising data for its rival.

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Though Lilly shares have since fallen below this entry, they still hold a strong Relative Strength Rating of 93, according to IBD Digital. This places LLY stock in the top 7% of all stocks in terms of 12-month performance.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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