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Lilly's (LLY) Diabetes Treatment Tirzepatide Gets FDA Nod

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Eli Lilly and Company (LLY - Free Report) announced that the FDA has granted approval to its dual GIP and GLP-1 receptor agonist, tirzepatide injection for treating type-II diabetes. The injection, which is the only GIP and GLP-1 receptor agonist approved for treating type-II diabetes, will be marketed by the trade name of Mounjaro.

Mounjaro is a new class of diabetes treatment that activates the body's receptors for GIP and GLP-1, which are natural incretin hormones. Mounjaro will be available in six doses (2.5 mg, 5 mg, 7.5 mg, 10 mg, 12.5 mg, and 15 mg) as an auto-injector pen. It is expected to be launched in the United States in the next few weeks.

Lilly’s shares have risen 5.6% this year so far compared with the industry’s increase of 2.1%.

 

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Mounjaro has shown impressive blood sugar reductions and weight loss in a broad range of type II diabetes patients in all phase III SURPASS studies. In the SURPASS studies, the 5 mg dose of tirzepatide led to an A1C reduction between 1.8% and 2.1% while the 10 mg and 15 mg doses led to A1C reductions between 1.7% and 2.4%. In these studies, tirzepatide was compared against Novo Nordisk’s (NVO - Free Report) Ozempic (injectable semaglutide), insulin glargine and insulin degludec. In the studies, treatment with tirzepatide also led to significant weight loss (mean change in body weight- a key secondary endpoint in all studies) between 12 and 25 pounds on an average.

Novo Nordisk's semaglutide is also approved under the brand name Wegovy as a treatment for obesity in the United States.

Tirzepatide is also in phase III studies for obesity and heart failure with preserved ejection fraction (HFpEF) and in phase II studies for NASH.

While the injection is not yet approved for weight reduction, it has shown “superior weight loss” in the 72-week phase III SURMOUNT-1 study, data from which were announced in April. In the study, treatment with tirzepatide led to up to 22.5% (52 pounds or 24 kg) weight loss in obese or overweight adults with at least one comorbidity, who do not have diabetes. Moreover, 63% of the participants given tirzepatide 15 mg experienced at least 20% body weight reduction, which was a key secondary endpoint. Tirzepatide is the first drug to achieve more than 20% weight loss on average in a phase III study.

Tirzepatide is one of the two key pipeline candidates for Lilly, which have multibillion-dollar sales potential, the other being donanemab for early Alzheimer's disease.

For donanemab, Lilly has filed a rolling submission to the FDA under the accelerated approval pathway and intends to complete the initial regulatory submission in the second quarter. Lilly expects a potential regulatory decision in early 2023.

Zacks Rank and Stocks to Consider

Lilly currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked biotech stocks are Alkermes (ALKS - Free Report) and Sesen Bio , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’ loss per share estimates for 2022 have narrowed from 13 cents to 3 cents in the past 30 days. Shares of ALKS have risen 15.6% year to date.

Earnings of Alkermes beat estimates in each of the last four quarters, the average being 350.5%.

Sesen Bio’s loss per share estimates for 2022 have declined from 33 cents to 32 cents in the past 30 days. Shares of SESN have declined 46.9% in the year-to-date period.

Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 69.9%.


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