Eli Lilly & Co. (LLY): EASD Updates and Sellside Event Further Underscore Rapidly Evolving Next Gen Obesity Pillars

At the ongoing EASD conference, LLY presented updates across its cardiometabolic portfolio, most notably for the Ph2 eloralintide + tirzepatide combination (eloraTZP) in patients with obesity and T2D, which showed the highest efficacy yet (23% weight loss and -2.9% HbA1C reduction) in that patient population. As the prior Ph1b data for obesity was circulated already, we believe that best-in-class efficacy was anticipated and already reflected into the stock with investor focus likely on the tolerability profile, and hence the modest stock reaction (-2.3% vs. DRG -1.6%). On that front, while the relatively high drop-out rate of the high-dose combination (27%) raised some questions, LLY believes an optimized titration schedule/dosing in the Ph3 will improve this. Additionally, we note that the discontinuation rate due to adverse events in the lower-dose eloraTZP (11%) was less than placebo (17%), and for eloralintide monotherapy, the drop-out rate was strikingly low (3%), in line with th