Eli Lilly (NYSE:LLY)'s newly FDA-approved obesity treatment, Mounjaro, also known as Zepbound, has spurred a 3.2% rise in the company's stock on Wednesday. The drug, originally developed for diabetes, is poised to compete with Novo Nordisk (NYSE:NVO)'s Wegovy in the growing market for GLP-1 class drugs like Ozempic.
The approval of Mounjaro for obesity treatment has intensified the competition between Eli Lilly and Novo Nordisk for leadership in the type 2 diabetes and obesity treatment markets. Despite Novo Nordisk's Ozempic currently leading the market, Mounjaro is quickly gaining ground. Within a year, sales of Mounjaro have surged from $187 million to over $1.4 billion, indicating its strong market potential.
The Bank of Montreal projects the market for GLP-1 class drugs to reach $100 billion by 2035, positioning Eli Lilly favorably. The company's stock has seen a 69% year-to-date rise aligned with these developments.
Looking ahead into mid-2024, Eli Lilly and BioAge are planning a phase 2 clinical trial to test a combination of azelaprag and tirzepatide. This combination could potentially enhance weight loss while preserving muscle volume, further strengthening Eli Lilly's market position. The partnership between Eli Lilly and BioAge is primarily focused on designing and executing clinical trials, with BioAge retaining all commercialization rights for azelaprag. The financial details of this partnership have not been disclosed.
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