Pharmaceutical giant Eli Lilly’s (NYSE:LLY) experimental weight loss injection, Retatrutide, helped patients lose up to 24.2% of their weight after 48 weeks of treatment, yielding superior results to those of other obesity drugs. LLY shares were up nearly 1.3% in Tuesday’s pre-market trading session.
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Eli Lilly’s Obesity Drug Impresses
Eli Lilly’s Phase 2 trial of Retatrutide, the weekly-once injected drug, involved 338 obese or overweight participants. Patients who took Retatrutide lost 24.2%, or 58 pounds, on average after 48 weeks, while those who took the placebo shed 2.1% of their body weight over the same period. Meanwhile, patients who took a 12-milligram dose lost 17.5% or 41 pounds of their body weight, on average after 24 weeks, compared to 1.6% in the case of those who received the placebo.
The phase 2 data from Retatrutide was presented in a symposium at the American Diabetes Association and simultaneously published in The New England Journal of Medicine (NEJM). The trial’s researchers noted that participants’ weight did not plateau after 48 weeks, indicating that the full weight loss efficacy was not achieved and a longer duration study could reveal more information about the efficacy of the drug.
The Highly Attractive Weight Loss Market
The weight loss therapies market is estimated to reach $150 billion by 2031, per Bloomberg estimates.
Eli Lilly’s other obesity drug candidate, Mounjaro, which is already approved for Type 2 diabetes, has helped patients lose up to 21% of their weight in clinical trials. Rival Novo Nordisk’s (NYSE:NVO) injectable medication, Wegovy, is cleared for obesity treatment and showed up to 15% weight loss in trials. Novo’s diabetes drug, Ozempic, is also experiencing impressive sales due to its weight loss effects.
It is worth noting that Wegovy works by mimicking one hunger-regulating hormone called glucagon-like peptide-1 (GLP-1) that targets areas of the brain regulating appetite and food intake. In comparison, Retatrutide mimics three different hunger-regulating hormones: GLP-1, GIP, and Glucagon.
Meanwhile, several other companies, including Pfizer (NYSE:PFE) and Amgen (NASDAQ:AMGN) as well as smaller players like Altimmune (NASDAQ:ALT), are also developing weight loss therapies and competing for a share of the multi-billion dollar market. On Monday, PFE shares fell nearly 4% after the company announced that it is discontinuing the development of one of its experimental weight loss drugs, Lotiglipron, due to safety concerns. It would continue developing its other weight loss drug, Danuglipron.
Is Eli Lilly Stock a Buy, Sell, or Hold?
On Monday, UBS analyst Colin Bristow reiterated a Buy rating on Eli Lilly stock with a price target of $498. Bristow thinks that the Phase 2 Orforglipron (Orfo) obesity and Type 2 diabetes mellitus (T2DM) data presented by Eli Lilly over the weekend were underappreciated by the Street. The analyst believes that Orfo is “another clear win” for the company.
Wall Street has a Strong Buy consensus rating on Eli Lilly based on 16 Buys and two Holds. The average price target of $461.85 implies 2% upside.
