Eli Lilly & Co.’s won US approval for its diabetes drug to treat obesity, unlocking blockbuster sales potential in a market that’s expected to hit $100 billion by 2030.
The weight-loss drug, branded Zepbound, will be sold at a slight premium to the price of the diabetes version of the same medication known as Mounjaro. It’ll cost $1,059.87 for a month’s supply, and be available by year end.
Lilly’s shares rose 1.8% at 1:08 p.m. in New York. They have gained 64% so far this year as of Tuesday’s close.
The mania over weight loss drugs is drawing responses from airlines and dialysis centers to big box chains like Walmart, sending stock markets into a frenzy. The drug, which couldn’t be marketed for weight loss prior to Wednesday’s approval, was publicized by Hollywood where it also became a punchline. The last time there was this much hype over a new drug was for Viagra, which was approved in 1998.
The weight-loss drug frenzy has boosted Lilly and Novo Nordisk A/S. Lilly is now the most valuable health-care company in the world, while Novo, the maker of Ozempic and Wegovy, took the title of Europe’s most valuable company in September.
Zepbound can cause side effects such as nausea, diarrhea, vomiting, constipation and abdominal pain, the US Food and Drug Administration said in a statement. The new label also includes a warning for suicidal behavior and thinking, which is not included on the Mounjaro label. US regulators have said they’re monitoring international probes into patient reports of suicidal thoughts that may be associated with GLP-1 receptor agonist drugs used for weight-loss.
In the US, labels for Novo’s Wegovy and Saxenda already include warnings for suicidal behavior and thoughts and recommend that patients using these drugs are monitored for worsening symptoms.
Mounjaro was approved last year as a treatment for adults with type 2 diabetes, but studies showing it helped patients lose up to 26% of their body weight, or 61.5 pounds, have led to increasing off-label use for weight loss. Sales of Mounjaro in the third quarter rose to $1.41 billion, up 44% from the three months ending in June and ahead of analysts’ average estimate of $1.26 billion.