Eli Lilly's weight-loss drug Zepbound showed promise as a treatment for sleep apnea, giving investors more confidence to continue owning the world's most valuable healthcare company even after it has been crushing the market. performance of the S&P 500 over the last three years. Study results released by Eli Lilly on Wednesday highlight the range of health benefits that drugs like Lilly's Zepbound and Mounjaro, known as GLP-1, may have outside of their increasingly popular uses in treating obesity and type 2 diabetes. Lilly is also studying GLP-1 to reduce the risk of cardiovascular events, such as heart attacks and strokes, and a type of fatty liver disease. Lilly's main rival in the category, Novo Nordisk, recently won approval in the United States to also market its anti-obesity drug Wegovy as a treatment for heart disease in overweight patients. Novo Nordisk was the first to market GLP-1 Wegovy and Ozempic for diabetes. While Ozempic is a diabetes medication, it has become the public face of this emerging class of medications that also lead to substantial weight loss. Eli Lilly said it plans to ask U.S. regulators to expand Zepbound's label to include obstructive sleep apnea, or OSA, later this year. OSA is one of three common types of sleep apnea, according to Mayo Clini c. Approval of this indication could help strengthen the insurance reimbursement case for Zepbound and further illustrate that losing weight can provide more than just cosmetic health improvements. Zepbound's insurance coverage has been spotty since it hit the U.S. market late last year due, in large part, to its cost, with a monthly list price of $1,060. “I think insurance companies are going to have to take note of some of these numbers,” Jim Cramer said Wednesday on CNBC. The active ingredient behind Zepbound and Mounjaro, known as tirzepatide, is the core of our investment thesis at Eli Lilly. Jim has long said that tirzepatide could become the best-selling drug of all time for its ability to treat obesity and other conditions. It was first approved to treat type 2 diabetes under the brand name Mounjaro in May 2022. Eli Lilly's stock has taken the GLP-1 craze to new heights in recent years. The stock hit an all-time high of $800.78 per share on March 4, with a market capitalization of more than $750 billion. LLY YTD mountain Eli Lilly YTD data on obstructive sleep apnea could open the door for Medicare to cover Zepbound for that condition, Morgan Stanley analysts said in a note to clients Wednesday. Medicare prescription drug plans, known as Part D, are currently prohibited from covering medications strictly for obesity. Last month, the US government agency that administers the senior health program enabled coverage for Wegovy de Novo when the drug is prescribed to reduce the risk of heart attacks and strokes. Obstructive sleep apnea is characterized by airway obstructions that cause people to repeatedly stop breathing during sleep and experience low levels of oxygen in their blood, causing them to wake up to start breathing again, according to the Clinic. Cleveland. This disrupts your ability to sleep well and, over time, can lead to other health complications, such as daytime sleepiness, heart damage, and even sudden death. Obesity may contribute to the development of OSA, which is estimated to affect approximately 39 million American adults, according to the National Council on Aging. The current standard of care for obstructive sleep apnea is positive airway pressure, or PAP, machines, which help keep patients' airways open while they sleep. Eli Lilly on Wednesday released preliminary data from a pair of late-stage trials, which showed that obese patients with moderate to severe obstructive sleep apnea saw improvements in their OSA over the course of a 52-week trial. In one trial, patients taking Zepbound alone experienced an average of 27.4 fewer incidents of restricted or completely blocked airflow per hour of sleep. Those taking the placebo saw on average a reduction of just 4.8 incidents per hour. In a second trial, OSA patients taking Zepbound and using a PAP machine experienced an average of 30.4 fewer incidents per hour, compared to six fewer in the placebo group. The results, which have not yet been peer-reviewed, met Wall Street's threshold to be considered a success, Deutsche Bank analysts said in a note Wednesday. Eli Lilly will present the full data at an American Diabetes Association conference in late June. The popularity of GLP-1 has skyrocketed in recent years. They mimic a hormone in the gut to improve blood sugar control and effectively suppress appetite, leading to weight loss. The active ingredient in Novo Nordisk's Ozempic and Wegovy, semaglutide, works similarly to Lilly's tirzepatide. The key difference: Lilly's compound targets a second hormone, called GIP, which is thought to increase its effectiveness. LLY NVO Mountain 2021-05-09 Eli Lilly vs. Novo Nordisk Shares of both companies have been on fire. Eli Lilly has gained nearly 300% over the past three years, including a 28% rise so far this year. Novo Nordisk shares have risen about 243% over the past three years and 19.5% so far in 2024. Along the way, those gains have derailed the performance of the S&P 500 and the healthcare sector index. health. The companies currently have a duopoly in the LPG-1 market, which some Wall Street analysts project could be worth $100 billion by the end of the decade. Despite the promise of treating other diseases, most of GLP-1's sales are likely to come from diabetes and obesity. In a note to clients last month, Bank of America raised its 2030 revenue forecast for tirzepatide to about $62 billion, with $54 billion for diabetes and obesity. Analysts projected obstructive sleep apnea revenues of $3 billion. (Jim Cramer's Charitable Trust is long LLY. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS OR IS CREATED BY VIRTUE OF THE RECEIPT OF ANY INFORMATION PROVIDED IN RELATION TO THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR BENEFITS ARE GUARANTEED.
An injectable pen of Zepbound, Eli Lilly's weight loss drug, is on display in New York City on December 11, 2023.
Brendan Mcdermid | Reuters
Eli LillyWeight-loss drug Zepbound showed promise as a treatment for sleep apnea, giving investors more confidence to continue owning the world's most valuable healthcare company even after it has been crushing the S&P 500's performance for the last three years.
