Eli Lilly crushed first-quarter estimates and reported positive results for its experimental obesity treatment on Thursday, leading LLY stock to surge.
In the final-phase study, patients with obesity — but not diabetes — lost up to 52 pounds while taking Lilly's tirzepatide for 72 weeks. Nearly two-thirds of patients taking a higher dose of the drug lost at least 20% of their body weight.
The results help bolster Lilly's tirzepatide, which the company is also studying in diabetes, heart failure, cardiovascular conditions and nonalcoholic steatohepatitis, a liver condition. The firm notes obesity is a complicated condition that can lead to a cascade of other diseases.
"Tirzepatide is the first investigational medicine to deliver more than 20% weight loss on average in a Phase 3 study, reinforcing our confidence in its potential to help people living with obesity," Jeff Emmick, Lilly's vice president of product development, said in a written statement.
On today's stock market, LLY stock popped 4.3% to 297.27.
LLY Stock Bolstered On Tirzepatide
Tirzepatide works by activating two receptors in the body responsible for incretin. Incretin is a group of hormones responsible for lowering blood sugar. Patients took tirzepatide once a week for nearly a year and a half.
Those on the low dose lost 16% of their body weight, compared with 21.4% and 22.5% for mid- and high-dose patients. Nearly all tirzepatide-treated patients achieved at least 5% weight loss compared. Just 28% of patients achieved 5% weight loss taking a placebo.
On another measure, 55% and 63% of mid- and high-dose patients lost at least 20% body weight vs. just 1.3% of those taking the placebo.
The test results helped LLY stock pop into a buy zone above a cup buy point at 284, according to MarketSmith.com. The 5% chase zone runs from 294-298.20.
First Quarter Handily Beats
The first quarter was also a bright spot as Lilly handily topped expectations. Adjusted earnings rocketed 63% to $2.62 a share. Sales increased 15% to $7.81 billion. Both measures easily topped LLY stock analysts' forecast for $2.29 per share and $7.29 billion, respectively.
The best growth came from sales of Lilly's Covid antibodies, which soared 81% to $1.47 billion. Its biggest moneymaker, diabetes drug Trulicity, generated $1.74 billion, rising 20%.
Trailing Covid antibodies and Trulicity, Eli Lilly's Humalog, Taltz, Verzenio and Jardiance all came in with double-digit gains. Humalog and Jardiance are diabetes treatments, while Taltz is approved for autoimmune conditions and Verzenio treats breast cancer.
On the flip side, sales of chemotherapy Alimta and diabetes meds Humulin and Basaglar fell by double digits.
Guidance was mixed too. Eli Lilly boosted its sales outlook by $1 billion to $28.8 billion to $29.3 billion. But the company cut its adjusted profit expectations to $8.15-$8.30 per share. The sales view beat LLY stock analysts' call, but earnings would come in short.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
