Eli Lilly (LLY Quick QuoteLLY - Free Report) announced that the FDA has approved the label expansions of its diabetes drugs, Jardiance (empagliflozin) and Synjardy (empagliflozin and metformin hydrochloride), in children aged 10 years and older with type 2 diabetes (“T2D”).

The regulatory agency approved using Jardiance and Synjardy as additions to diet and exercise to improve blood sugar control in children with T2D. Both drugs were initially approved by the FDA in 2014 and 2015, respectively, to treat T2D in adults.

Following this approval, Jardiance and Synjardy are the first SGLT2 inhibitors approved for children with T2D. Prior to this approval, metformin was the only other oral therapy approved for treating children with T2D since 2000.

Shares of Eli Lilly have increased 23.8% so far this year compared with the industry’s 2.0% rise.

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The FDA approval is based on data from the phase III DINAMO study, which showed that treatment with Jardiance demonstrated statistically significant reduction in lowering hemoglobin A1c (a measure of average blood sugar) in T1D patients aged 10-17 years compared with a placebo. Jardiance and Synjardy work by increasing excretion of glucose in the urine.

T2D, the most common form of diabetes, is a condition wherein the body is unable to make or use insulin normally, leading to high levels of glucose (sugar) in the blood. Per management estimates, over 5,700 children are diagnosed with T2D every year.

Jardiance and Synjardy have been developed by Lilly in collaboration with Boehringer Ingelheim. This partnership was announced between the two companies in 2011. Per the terms of agreement, the companies equally share the ongoing development and commercialization costs. Lilly receives a royalty on net product sales of Jardiance and Synjardy from Boehringer Ingelheim.

Zacks Rank & Stocks to Consider

Eli Lilly currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the overall healthcare sector include ANI Pharmaceuticals (ANIP Quick QuoteANIP - Free Report) , Ligand Pharmaceuticals and Novartis (NVS Quick QuoteNVS - Free Report) . While ANI Pharmaceuticals and Ligand Pharmaceuticals sport a Zacks Rank #1 (Strong Buy), Novartis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, the estimate for ANI Pharmaceuticals’ 2023 earnings per share (EPS) have increased from $2.42 to $3.31. During the same period, the earnings estimates for 2024 have risen from $3.76 to $4.32. Shares of ANI Pharmaceuticals are up 29.6% in the year-to-date period.

Earnings of ANI Pharmaceuticals beat estimates in each of the last four quarters, delivering an average earnings surprise of 68.64%.

In the past 60 days, the estimate for Ligand’s 2023 earnings EPS increased from $4.16 to $5.25. During the same period, the earnings estimate for 2024 has increased from $4.58 to $4.69. In the year so far, the shares of Ligand have risen 15.1%.

Ligand Pharmaceuticals beat earnings estimates in two of the last four quarters, while missing the mark on the other two occasions. On average, the company’s earnings witnessed an earnings surprise of 21.50%.

In the past 60 days, the estimate for Novartis’ 2023 and 2024 EPS have increased from $6.57 to $6.74 and $7.08 to $7.28, respectively. Shares of Novartis are up 11.2% in the year-to-date period.

Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.15%.