Eli Lilly stock rose, but pulled back from more bullish gains, Wednesday after the company's weight-loss drug significantly reduced nighttime sleep apnea events in people with obesity.
The results bolster Lilly's argument that lowering a person's body weight could improve sleep apnea, a condition in which breathing while sleep becomes more difficult due to a collapsed airway. Typically, patients with sleep apnea wear masks called CPAPs, or continuous positive airway pressure devices. But CPAPs can be cumbersome to wear and make some noise.
After a year, patients who don't use CPAPs had 27.4 fewer sleep apnea events per hour, compared to a 4.8-event reduction for the placebo group. That's a 55% improvement. Patients who use CPAPs had 30.4 fewer events every hour — a nearly 63% improvement in symptoms. In the CPAP-using group, placebo recipients experienced six fewer sleep apnea events per hour.
"The results look incrementally positive relative to market expectations for Eli Lilly," David Song, chief investment partner for Tema ETFs, told Investor's Business Daily in an email. Tema holds Lilly stock in its Tema Obesity and Cardiometabolic exchange-traded fund. Song also noted that "the timelines of filing in midyear as a sign of confidence from management."
Eli Lilly stock jumped as much as 3.4%, but closed up just 0.5% at 750.77. Shares of CPAP-maker ResMed toppled almost 6% to 173.83.
Eli Lilly Stock Goes After Sleep Apnea Market
There aren't currently any drugs approved for sleep apnea treatment, Leerink Partners analyst David Risinger said in a note. Patients often receive stimulants to promote wakefulness after sleeping poorly at nighttime.
"Thus, we assume that these data could result in priority review and approval in obstructive sleep apnea by early 2025," he said. "The addition of obstructive sleep apnea to the label could provide a meaningful entry-point for access."
Approximately 70% of people with obstructive sleep apnea also have obesity, he noted.
Risinger kept his outperform rating on Eli Lilly stock.
As for ResMed stock and Inspire Medical Systems, which makes an implantable treatment for sleep apnea, Tema's Song says he needs more data to determine whether the potential additional approval for Eli Lilly's weight-loss drug, tirzepatide, could have a deep impact.
ResMed Responds To Lilly Study
In an emailed statement, ResMed noted Lilly ran its study in patients unwilling or unable to use CPAP devices. This highlights the importance of comprehensive approaches to improving sleep health. Further, evidence suggests patients diagnosed with sleep apnea and prescribed a weight-loss drug in the GLP-1 class, like tirzepatide, are more likely to begin using a CPAP, the company said.
"It's crucial to understand that the (study called) Surmount-OSA was not designed to compare tirzepatide directly with PAP therapy, nor was it aimed at establishing a combination therapy," the company said. "As the gold standard for treating OSA, PAP therapy remains at the forefront of our recommended treatment options.
Notably, Inspire stock surged 9.9% to 243.51 after Lilly released its sleep apnea treatment results. Inspire shares broke out of a cup base with a buy point at 226.38 earlier this month. Shares jumped back into the buy zone on Wednesday, according to MarketSurge.com.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
