What happened

Shares of Eli Lilly (LLY 0.12%) rose on Monday after the U.S. Food and Drug Administration (FDA) approved the pharmaceutical giant's new diabetes treatment, tirzepatide. As of 1:50 p.m. ET, Eli Lilly's stock price was up more than 3%.

So what

A phase 3 clinical trial showed tirzepatide to reduce A1C -- a key measure of average blood sugar levels -- better than existing treatment options. The drug, which will be marketed under the brand name Mounjaro, helps to activate the body's receptors for metabolic hormones that decrease blood glucose levels. It can be taken as a once-weekly injection in the abdomen, thigh, or upper arm.

The FDA approved tirzepatide as a complement to a healthy diet and exercise program to improve glycemic control in adults with type 2 diabetes. Eli Lilly plans to make Mounjaro available in the U.S. in the coming weeks.

A healthcare professional is testing a patient's blood glucose levels.

Image source: Getty Images.

Now what

Type 2 diabetes harms the body's ability to produce or make use of insulin, which regulates metabolism and promotes the absorption of glucose from the blood. More than 30 million Americans suffer from the disease, and many struggle to adequately manage their blood sugar levels. Eli Lilly hopes Mounjaro can begin to help change that.

Interestingly, tirzepatide also demonstrated a significant impact on weight loss. Participants in the study who received the drug lost between 12 and 25 pounds on average. That has doctors and investors intrigued by Mounjaro's potential to also serve as a treatment for obesity.