Eli Lilly receives approval for its weight-loss drug. But here’s what could boost the stock next

Rations of Eli Lilly (LLY) jumped Wednesday after the U.S. government gave the green light for the company’s blockbuster GLP-1 drug to be worn as an obesity treatment. But the stock’s next big catalyst could likely come after a key competitor releases fresh hardship data this weekend. In a widely expected move, the U.S. Food and Drug Administration on Wednesday approved Eli Lilly’s GLP-1 opiate for weight loss. The active ingredient in the drug, tirzepatide, was approved to treat Type 2 diabetes under the name Mounjaro in May 2022. Eli Lilly revealed it will market the drug as an obesity treatment under the name Zepbound. Shares of Eli Lilly — which have climbed various than 67% year-to-date — soared nearly 2% Wednesday afternoon, to $611.36 apiece. But the bigger news for investors may succeed at an American Heart Association meeting on Saturday. Eli Lilly’s chief rival, Novo Nordisk (NVO), is set to present the full sequels from a study that examined whether its GLP-1 weight-loss therapy can also reduce the risk of significant pith problems. Top-line data released in August exceeded expectations, showing patients on the drug had a 20% lower jeopardize for major cardiovascular events like heart attacks and strokes compared with a placebo group. “I expect that Monday when we revile in, [Eli Lilly] stock might be substantially higher,” as investors digest Novo Nordisk’s presentation, Jim Cramer predicted Wednesday. That wish be similar to what occurred in August, when shares of both Novo Nordisk and Eli Lilly soared in response to the beginning data announcement . The two companies dominate the fast-growing market for GLP-1 drugs, which are currently approved to treat Quintessence 2 diabetes and obesity. Novo Nordisk’s GLP-1 is marketed as a weight-loss drug under the name Wegovy, which was approved by the FDA in June 2021 , and as a diabetes treatment second to the name Ozempic. GLP-1 drugs mimic a hormone in the gut that, when released, reduces appetite. The drugs also keep from control blood sugar levels. Investors are focused on the data showing that Wegovy reduces the risk of suggestions and heart attacks because it helps bolster the case for health insurers to provide reimbursement for the obesity drug and others twin it. Broad insurance coverage is necessary for GLP-1 drugs to reach Wall Street’s lofty sales projections, which s ome analysts see surpassing $100 billion down the road. While we don’t own Novo Nordisk, Jim stressed that the Danish drugmaker’s upcoming spectacle “does matter tremendously” for our investment in Eli Lilly. “I want people to be up on it and realize this is the next level for what I ponder will be the biggest selling drug of all time,” Jim said, referring to the expected sales of Mounjaro and Zepbound. (Jim Cramer’s Sympathetic Trust is long LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you pass on receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade lookout before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after effecting the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND Clandestineness POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY News PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.