Eli Lilly (NYSE:LLY) has ended a four-day losing streak on Monday after the company announced detailed results for its weight loss therapy tirzepatide as published in the New England Journal of Medicine and presented at the American Diabetes Association’s Scientific Sessions over the weekend.
Full results indicated that the average weight reduction of tirzepatide recipients reached up to 22.5% compared to 2.4% in the placebo group. 89% (5 mg) and 96% (10 mg and 15 mg) of those who took tirzepatide achieved at least 5% body weight reductions compared to 28% in the placebo arm.
The topline data had previously indicated that the Phase 3 trial met both co-primary endpoints for tirzepatide as an adjunct to a low-calorie diet and increased physical activity.
The 2,539-patient trial was designed to evaluate tirzepatide against placebo in adults without type 2 diabetes who were obese or overweight with at least one of the several pre-existing conditions such as hypertension and obstructive sleep apnea.
“We believe tirzepatide's (effectiveness) on weight loss is unmatched by other pharmacological treatments and, as further emphasized in the accompanying New England Journal of Medicine editorial, the tirzepatide data 'could have major ramification for people with obesity’” Mizuho analyst Vamil Divan wrote in response.
“The drug’s impact on weight should make it an even more meaningful driver of the Lilly story over time,” he added.
Divan has a Buy rating on Lilly (LLY) and classifies the stock as his top large-cap pick. However, Divan’s tirzepatide sales estimate of over $14B stands well above that of Goldman Sachs’ Chris Shibutani.
Shibutani projects only $7B peak sales for tirzepatide and maintains a Neutral rating on the stock, arguing that its current trading implies more than $10B in sales.
In the weight loss market, Tirzepatide, currently approved in the U.S. for type 2 diabetes mellitus, is expected to rival Wegovy, an obesity drug from Novo Nordisk (NVO) (OTCPK:NONOF).
Guggenheim recently upgraded the Danish pharma citing an upcoming data readout from the cardiovascular outcomes trial for the therapy.