Lilly Jumps After Results From Next Generation Diabetes Drug

(Bloomberg) -- Diabetics getting the highest dose of Eli Lilly & Co.’s tirzepatide experienced dramatic weight loss in a late-stage study, and more than half of those patients saw their blood-sugar levels fall back to a normal range.

Lilly jumped as much as 5.5% to the highest since August, reversing a premarket slide as investors continued to digest data that included a high number of people stopping treatment in the study. Shares of rival Novo Nordisk A/S closed 2.5% higher in Copenhagen, the biggest gain in over a month.

Diabetes medicines are big business and with the obesity crisis driving nearly $150 billion a year in medical costs in the U.S., according to the Centers for Disease Control and Prevention, drugmakers big and small are looking for solutions. Medicines that can potentially reverse the disease as well as help people lose weight could bring in billions of dollars in new revenue.

Lilly is looking to extend its diabetes franchise beyond the blockbuster Trulicity, which is expected to generate more than $5 billion in revenue this year. Trulicity belongs to an increasingly competitive class of drugs, called GLP-1, that includes Novo’s Ozempic for diabetes and Saxenda for obesity, as well as AstraZeneca Plc’s Bydureon. Tirzepatide targets not only the GLP-1 receptor, but also a second target known as GIP. That dual action could potentially make Lilly’s medicine even more potent.

Participants in Lilly’s study lost as much as 11% of their body weight, or just over 20 pounds (9.5 kilograms), with the highest dose of the experimental medicine, according to the initial results. Blood sugar as measured by A1C levels was trimmed by about 2%. At the highest dose, 52% of participants had A1C levels below 5.7%, which many clinicians consider to be a non-diabetic range.

Side Effects

The number of participants that stopped treatment ranged from 9.1% to 22% across the various doses, compared with 15% for people getting a placebo. Lilly said much of the discontinuations were due to concerns over the pandemic or personal reasons rather than adverse events. The study showed participants getting tirzepatide had a higher incidence of nausea, vomiting and diarrhea than those getting the placebo.

Less than 7% of discontinuations across the different arms of the study were due to adverse events and lower than what was seen in earlier studies, Jamie Croaning, Lilly’s global brand development leader, said in an email. He viewed the results as encouraging and said they were “comparable” to other drugs in the class.

“The blood sugar improvements for the product appear best in class,” said Chris Schott, an analyst with JPMorgan. He added that the high dropout rate impacted the analysis and further data will be needed to quash bearish concerns, but overall Lilly has “a highly competitive asset in tirzepatide.”

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