Eli Lilly Stock Jumps After Weight-Loss Drug Significantly Reduces Risk of Type 2 Diabetes In Trial, Retail Chatter Grows

Eli Lilly said on Tuesday that its weight-loss drug significantly reduced the risk of progression to Type 2 diabetes by 94% among adults with pre-diabetes and obesity or overweight compared to a placebo.

Tirzepatide was evaluated in 1,032 adults who had pre-diabetes at randomization and obesity or overweight for a treatment period of 176 weeks, followed by a 17-week off-treatment period.

Tirzepatide was approved by the U.S. FDA as Mounjaro for adults with type 2 diabetes to improve glycemic control in May 2022. It was approved as Zepbound for adults with obesity or those who are overweight who also have a weight-related co-morbid condition in November 2023.

“In a key secondary endpoint, tirzepatide led to a significant reduction in the risk of progression to type 2 diabetes in adults with pre-diabetes and obesity or overweight from baseline to week 176,” the company stated.

Following the announcement, shares of the drug-maker rose nearly 4% on Tuesday morning. Stocktwits users are expressing optimism on the development and the sentiment meter gradually inched-up into the ‘bullish’ territory (57/100) while message volume jumped into the ‘normal’ zone (54/100).

Jeff Emmick, senior vice-president, product development at Lilly stated obesity is a chronic disease that puts nearly 900 million adults worldwide at an increased risk of other complications such as type 2 diabetes. “These data reinforce the potential clinical benefits of long-term therapy for people living with obesity and pre-diabetes,” he said.

Meanwhile, Eli Lilly is Wells Fargo's new top pick with the brokerage reportedly noting that the drug-maker has potential to report upside surprises with improving supply and outside U.S. growth.

The company recently announced its second-quarter results, surpassing Wall Street’s earnings and revenue estimates. It also raised its full-year guidance. The firm reported earnings per share (EPS) of $3.92 compared to an estimate of $2.60 while revenue came in at $11.30 billion versus an estimate of $9.92 billion.

The highlight of the earnings report came in the form of an increase in its full-year guidance by $3 billion to the range of $45.40 billion to $46.60 billion. Management’s upgraded outlook was primarily driven by the strong performance of Mounjaro and Zepbound, as well as the firm’s non-incretin medicines.