Eli Lilly’s Zepbound receives FDA approval to treat obesity-related sleep apnea – Novo Nordisk (NYSE:NVO), Eli Lilly (NYSE:LLY)

On Friday, the U.S. Food and Drug Administration approved Eli Lilly and Company Li Lai weight loss pills Zepp Bond For the treatment of sleep apnea

What happened: The FDA’s decision makes Zepbound the first drug approved to treat patients with obesity and moderate to severe obstructive sleep apnea (OSA).

“Too often, OSA is considered ‘just snoring,'” says Julie FlegelCEO sleep planin a press release from Eli Lilly and Company. The disease affects an estimated 80 million Americans, 20 million of whom have moderate to severe disease.

See also: Weight-loss drug war heats up: Amgen challenges Eli Lilly, Novo’s dominance

In a separate press release, the FDA emphasized that Zepbound should be used in conjunction with a low-calorie diet and increased physical activity for best results.

CNBC noted that the approval could have a significant impact on Zepbound’s insurance coverage, which could include Medicare, which currently limits coverage of the obesity drug unless additional health benefits are approved.

The development also gives Eli Lilly an advantage over its competitors Novo Nordisk NVOCCwhose Wegovi Not approved for the treatment of sleep apnea.

Why it’s important: Zepbound’s effectiveness has been proven in clinical trials. The results showed that nearly half of the patients who received the highest dose experienced disease remission, the report noted.

This is defined by a significant decrease in the apnea-hypopnea index (AHI), a key marker for the diagnosis of OSA.

The approval comes as Eli Lilly continues to expand its manufacturing capabilities, including a $3 billion investment in Kenosha County, Wisconsin, in December to meet growing demand for its diabetes and obesity drugs.

In October, Eli Lilly announced third-quarter revenue of $11.44 billion, an increase of 20% year-on-year, but did not meet expectations of $12.10 billion. Zepbound generated $1.26 billion in revenue.

Price Action: LLY shares rose 1.35% to $767.76 on Friday, according to Benzinga Pro. Year to date, LLY has gained 29.65%.

The latest ratings from B of A Securities, Wolfe Research and Deutsche Bank set an average price target of $1,004, indicating potential upside of 30.77%.

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