Eli Lilly stock rose Tuesday after the drugmaker's blockbuster weight-loss drug significantly cut the risk of developing diabetes over three years.
The company tested its drug, tirzepatide, in patients with prediabetes and obesity. After three years, patients were 94% less likely to have progressed to type 2 diabetes vs. the placebo group. Further, they lost an average 22.9% of their body weight compared to a 2.1% drop for placebo recipients.
"These data reinforce the potential clinical benefits of long-term therapy for people living with obesity and prediabetes," Jeff Emmick said in a written statement. Emmick is the senior vice president of product development for Lilly.
On today's stock market, Eli Lilly stock advanced 3.1% to 949.97. Shares are inching closer to their previous intraday record high of 966.10, achieved July 15.
Expanding Uses For Weight-Loss Drug
Lilly sells tirzepatide as a Mounjaro in diabetes treatment and the weight-loss drug Zepbound.
Though it's relatively new to the market — its first approval was in 2022 — tirzepatide is already a heavy-duty moneymaker. Last year, it brought in $5.34 billion in sales. This year, FactSet-polled analysts expect it to generate nearly $18 billion in sales.
Eli Lilly stock has close ties to the company's efforts to expand tirzepatide's uses. The company is testing tirzepatide in myriad conditions thought to stem from obesity, including heart diseases, sleep apnea and Alzheimer's disease.
Emmick noted there are nearly 900 million adults worldwide at risk of complications due to obesity.
Lilly is also making the argument for long-term use of tirzepatide. During a 17-week follow-up period in which patients stopped treatment, some began to regain weight and developed type 2 diabetes. That resulted in an 88% overall reduction in the risk of developing diabetes.
Eli Lilly Stock Has High Ratings
Eli Lilly stock is highly rated. Shares have an IBD Digital Composite Rating of 98, meaning Lilly sits in the top 2% of all stocks when it comes to fundamental and technical measures. Lilly shares also have a strong Relative Strength Rating of 93, a 1-99 measure of a stock's 12-month performance.
Notably, Eli Lilly stock ranks No. 50 on the IBD 50 list of elite growth stocks.
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