Eli Lilly (LLY) shares spiked ~3% on Thursday after the obesity drugmaker posted Phase 3 data showing its next-gen therapy retatrutide can generate up to 24% of weight loss, a “best-in-class” efficacy according to analysts.
Citing 68-week data, Indiana-based LLY said in the premarket that its Phase 3 TRIUMPH-4 succeeded, as retatrutide at the highest dose caused up to 24% weight loss while reducing a clinical score related to osteoarthritic pain.
The GIP, GLP-1, and glucagon triple hormone receptor agonist has delivered “best-in-class weight loss data,” Edmund Ingham, Seeking Alpha Investing Group Leader for Haggerston BioHealth, wrote, reiterating his Buy rating on LLY.
LLY’s “Zepbound achieved mean average weight loss in patients of >20%—a best-in-class result at the time—since equaled by Novo Nordisk’s (NVO) high-dose Wegovy,” Ingham wrote, referring to existing FDA-approved obesity therapies.
“The results have exceeded analysts’ expectations (who had hoped for >20% weight loss, which retatrutide easily exceeded),” he added.
“Though the 68-week study is for osteoarthritis of the knee rather than obesity-focused, we suspect the weight loss efficacy above our 25% expectations will be well-received by investors,” Citi analyst Geoff Meacham, who has a Buy rating on LLY, added, according to Bloomberg.
“With relatively clear safety, these results help to solidify retatrutide’s profile as an even higher efficacy next-generation GLP-1+ asset,” Evan David Seigerman, an analyst at BMO Capital Markets, wrote, with an Outperform rating on LLY.
The results met “the high bar set by investors into the readout,” Seigerman said, while J. P. Morgan’s Chris Schott downplayed safety concerns after as many as 18% of participants who received retatrutide at the highest dose dropped out of TRIUMPH-4 due to adverse events.
Despite a tolerability profile that appeared worse than Zepbound’s, the rates of gastrointestinal side effects were not all that high compared to the broader GLP-1 class of obesity drugs, Schott, who has an Overweight recommendation on LLY, added.