Eli Lilly and Company’s (LLY Quick QuoteLLY - Free Report) shares are up almost 4% following a positive FDA panel recommendation for its type II diabetes drug, Jardiance (SGLT-2 inhibitor). Lilly and its partner, Boehringer Ingelheim, are seeking FDA approval for the inclusion of data from the EMPA-REG OUTCOME study, which showed cardiovascular (CV) risk reduction.

The FDA’s Endocrinologic and Metabolic Drugs Advisory Committee met to review the data and voted 12-11 that enough evidence exists to establish that Jardiance reduces CV death in adults with type 2 diabetes and established CV disease.

While the FDA usually follows the advice of its advisory panel, it is not required to do so. Considering the vote in favor of label expansion was so close, concerns remain that the FDA might ask for another study.

However, inclusion of this data in the label would be a huge boost for Lilly. With about 50% of deaths in type II diabetics resulting from CV disease, the addition of this data to Jardiance’s label would lead to a major surge in sales.

Meanwhile, earlier this year, Lilly and Boehringer had announced plans to conduct two outcome studies investigating Jardiance for the treatment of people with chronic heart failure. The studies are scheduled to begin by next April and will be conducted in patients with chronic heart failure both with and without type II diabetes.

While the diabetes market holds immense commercial potential, it is pretty crowded given the presence of companies like Novo Nordisk A/S (NVO Quick QuoteNVO - Free Report) , Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) and Merck & Co. Inc. (MRK Quick QuoteMRK - Free Report) among others.

Lilly is a Zacks Rank #3 (Hold) stock. Johnson & Johnson is a better-ranked stock in the large-cap pharma sector with a Zacks Rank #2 (Buy).

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