Eli Lilly (LLY -1.22%) will report third-quarter earnings on Oct. 29, with the market paying particularly close attention to sales of its blockbuster diabetes and obesity drugs Mounjaro and Zepbound. But the company's experimental obesity treatment, retatrutide, could have a much greater influence on its long-term growth.
If you're unfamiliar, retatrutide is a once-weekly injection that targets three hormone receptors involved in regulating appetite, blood sugar, and metabolism. By comparison, Zepbound targets two. And thus far, clinical results have been impressive.
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Results matter
In July, Lilly announced that retatrutide achieved average weight loss of 22.6% over 80 weeks in a Phase 3 trial involving patients with obesity and established cardiovascular disease. Another Phase 3 study involving overweight or obese patients and type 2 diabetes produced average weight loss of up to 20.8%. Earlier Phase 3 research showed that patients without diabetes who received the highest dose of retatrutide lost an average of 28.3% of their body weight over 80 weeks. That said, the latest results also raised some questions.
Although retatrutide improved several cardiovascular risk factors, including blood pressure and cholesterol, its Phase 3 TRIUMPH-3 study didn't establish whether the drug reduces the risk of major cardiovascular events. That leaves Lilly with more work to do in demonstrating benefits beyond weight loss. Still, retatrutide could eventually complement Zepbound rather than simply replace it, giving physicians another treatment option for patients who need greater weight reduction.
NYSE: LLY
Key Data Points
Lilly plans to submit retatrutide for FDA approval in the first quarter of 2027. Meanwhile, its existing obesity treatment business continues growing rapidly. Second-quarter revenue reached $22.97 billion, up 48% year over year, driven largely by demand for Mounjaro and Zepbound. Those sales will likely dominate the Oct. 29 earnings discussion.
But retatrutide's regulatory progress, eventual commercial launch, and ability to demonstrate additional health benefits could play a much larger role in determining where Lilly's business stands several years from now. In other words, don't lose sight of the long-term horizon for this company.
