Eli Lilly’s obesity treatment tirzepatide has been granted “fast track” status by the Food and Drug Administration, meaning it could gain approval by the end of 2023. The drug, which has already been approved to treat type 2 diabetes with Mounjaro’s name in May, has the potential to be a blockbuster, analysts have said. Last month, UBS estimated that peak annual sales would reach $25 billion, which would dwarf sales of AbbVie’s rheumatoid arthritis treatment Humira, which currently holds the title of “the biggest drug in history.” Lilly said Thursday that he plans to begin an application for FDA approval on a rolling basis by the end of this year, and will have the results of his second completed phase 3 clinical trial by the end of April. Wells Fargo analyst Mohit Bansal said it would normally take six to 10 months for the FDA to review the data, but the expedited process could reduce process time, as data from its previous clinical trials and manufacturing information can be shipped before Surmount- 2 trial is complete. “We see a high probability that a 6-month review will make approval likely in Q4 2023,” Bansal wrote in a research note. Morgan Stanley analyst Terence Flynn estimated a product launch in the first half of 2024. Although this timing is in line with what the company had previously outlined, it had been anticipated that the process could move even faster based on strong results in the first of two Phase 3 clinical trials. On par with bariatric surgery The company’s Surmount-1 study had shown patients lost between 16% and 22.5% of their body weight while taking the medication, which is much closer to the results achieved by bariatric surgery. More than 40% of American adults are obese, according to the Centers for Disease Control and Prevention, and its prevalence is expected to increase in the future. Obesity puts people at higher risk for a host of other conditions and costs the US nearly $173 billion each year in 2019 dollars, the CDC said. In July, Morgan Stanley had said it expected the weight loss market to be worth more than $50 billion by the end of the decade. Lilly shares rose slightly Thursday on the news, but the stock has gained more than 20% since the start of the year. On September 28, it hit a 52-week high of $341.70. In a research note, Morgan Stanley’s Flynn said any weakness in Lilly shares is a buying opportunity. He rates the stock as overweight and has a price target of $412, which is up about 24% from Wednesday’s close. More pressure on Novo Nordisk The schedule also increases pressure for Novo Nordisk’s competitor treatment, Wegovy. Both drugs use glucagon-like peptide 1, or GLP-1, receptor agonists to delay gastric emptying, promote satiety, and regulate blood sugar, but tirzepatide has a second incretin hormone, insulinotropic-dependent polypeptide. glucose or GIP. Wegovy has been shown to help patients lose around 15% of their body weight on average, and the drug has been very popular. However, sales have been limited by manufacturing problems, which have limited its sales. In addition, the cost of the drug, which is not always covered by health insurance plans, also prevents some patients from taking it. Wegovy has a list price of around $1,300 a month. Read more UBS upgrades Eli Lilly to buy, says it’s developing arguably ‘biggest drug in history’ Investors previously bet on obesity drugs without much success. Why this next wave could be different Shares of Novo Nordisk were trading down less than 1% on Thursday. Shares of the company are down almost 6% so far this year. Beyond its enormous potential as a treatment for diabetes, obesity, and overweight, tirzepatide is also being studied as a treatment for a variety of other conditions, including kidney disease, sleep apnea, non-alcoholic steatohepatitis, prediabetes, and cardiovascular problems. Geoff Meacham of Bank of America has estimated that the drug could reach $100 billion in annual sales by 2035 if it were approved for these other diseases. —CNBC’s Michael Bloom contributed to this story.
Eli Lilly 2022 gains grow to 20% as it lays out plan for obesity drug, tirzepatide