Eli Lilly said Thursday it plans to begin the process of asking the Food and Drug Administration to approve its highly anticipated obesity treatment this year. LLY stock rose on the news.
The experimental drug, known as tirzepatide, is currently in a final-phase test called Surmount-2. But the FDA awarded Lilly a fast-track designation for tirzepatide, allowing it to begin sending data ahead of those test results. Lilly expects Surmount-2 results by the end of April and plans to finish its submission "shortly after."
This could put the obesity treatment on the market late next year, rivaling 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 some more room in an already broad market.
On today's stock market, LLY stock climbed 0.4% to 332.95.
LLY Stock: Eyes On Obesity Treatment
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 in diabetes management and as Wegovy in obesity treatment. Semaglutide targets one hormone.
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So far, the results for tirzepatide in obesity treatment have wowed and helped LLY stock to jump markedly. In the Surmount-1 study, patients took tirzepatide for 72 weeks and lost 16%-22.5% of their body weight, depending on the dosage. That translated to 35-52 pounds.
Recently, one analyst said tirzepatide could generate $25 billion in annual sales. The drug was the first in its class to win approval. But it didn't have to face an advisory committee and was approved on time in diabetes treatment.
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Mike Mason, president of Lilly Diabetes, notes obesity impacts nearly 100 million Americans and drives a significant number of costs in health care. Obesity is tied to a number of health concerns including nonalcoholic steatohepatitis and heart failure.
LLY stock has risen steadily on the hopes for tirzepatide in obesity treatment. Shares briefly broke out of flat base with a 335.43 buy point, according to MarketSmith.com. In that case, the breakout came on hopes for its Alzheimer's drug after Biogen presented promising data for its rival.
Though Lilly shares have since dipped below that entry, they still have a strong Relative Strength Rating of 93, IBD Digital shows. This puts LLY stock in the leading 7% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
