The U.S. Food and Drug Administration on Wednesday approved Eli Lilly's (LLY.N) drug for weight loss, giving the U.S. drugmaker official entry into a lucrative market that has captured Wall Street's enthusiasm this year.
The FDA approved tirzepatide for weight loss under the brand name Zepbound. It has been available as Mounjaro for type 2 diabetes since 2022 and had been increasingly used "off-label" for weight loss while the obesity approval was pending.
Zepbound will be available in the U.S. by the end of the year at a list price of $1,059.87, according to Lilly. That compares with a list of $1,349 per-package for Novo Nordisk's (NOVOb.CO) wildly popular weight-loss drug Wegovy.
The Lilly drug was approved for use by adults with a body mass index (BMI) - a measure of weight based on height - of at least 30, or a BMI of 27 or more if a patient also has another weight-related health issue, such as heart disease.
"Obesity and overweight are serious conditions that can be associated with some of the leading causes of death such as heart disease, stroke and diabetes,” John Sharretts, a director in the FDA’s Center for Drug Evaluation and Research, said in a statement.
The Indianapolis-based drugmaker said it is launching a commercial savings card program to make Zepbound cost as little as $25 for patients whose insurance agrees to cover the drug, and $550 for those whose insurance does not.
Eli Lilly shares have soared 67% in 2023 based on anticipation of approval of the drug for weight loss, making it the most valuable healthcare company on the S&P 500 index (.SPX). Even though the approval was widely expected, Lilly shares were up 1.8% in afternoon trade.
Mounjaro had sales of $1.41 billion in the third quarter with Lilly acknowledging supply constraints. After Wednesday's FDA approval, Lilly can now promote the drug for weight loss.
The approval was based partly on data from a late-stage trial of 2,539 adults with obesity, or excess weight and weight-related medical problems not including diabetes, as an adjunct to diet and exercise.
Zepbound's most common side effects include nausea, diarrhea, hair loss and gastroesophageal reflux disease, according to Lilly.
