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UBS said it believes that upcoming data for Eli Lilly’s (NYSE:LLY) GLP-1 drug tirzepatide in the treatment of sleep apnea will come in below Street expectations.
In a note, UBS said it sees the study, called SURMOUNT-OSA, demonstrating weight loss of 12-14% and AHI reduction of 30-37% from baseline in obese patients who took the drug. UBS said that current consensus sees the study showing weight loss of 20% with AHI reduction of 50%+ from baseline.
UBS said it bases its estimates on gender imbalance in the study, as only 30% of the participants are women and “it’s well documented that females disproportionately lose more weight than males.”
“We back our weight loss expectations using the 60-65% efficacy seen in prior GLP studies with similar gender imbalances,” UBS added.
Lilly markets tirzepatide under the name Zepbound for weight loss and Mounjaro for diabetes. The drug directly competes with Novo Nordisk’s (NVO) GLP-1 drug semaglutide, which it markets under the name Wegovy for weight loss and Ozempic for diabetes.
UBS said despite lowered expectations, it sees SURMOUNT-OSA hitting consensus expectations on study endpoints.
“Importantly, we note sleep apnea is already a comorbidity in Zepbound’s label with SURMOUNT-OSA anticipated to help drive increased access with payors, especially in the Medicare population,” UBS wrote.
“Given the strong overlap between sleep apnea and other obesity related comorbidities, we see little impact to the overall GLP franchise in a weak readout,” UBS added.
UBS has a buy rating on Lilly, with a price target of $910.
Other companies with GLP-1 drugs in development include AstraZeneca (AZN), Amgen (AMGN), Pfizer (PFE), Viking Therapeutics (VKTX), Terns Pharmaceuticals (TERN) and Structure Therapeutics (GPCR).
Leading makers of sleep apnea devices include Philips (PHG) and ResMed (RMD).
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