Lilly Just Reported More Than Half of Patients on Its New Weight Loss Drug Lost 20% of Their Body Weight — and a Third Lost 25%. Here's How the News Could Shake Up the Obesity Drug Market.

A new weight-loss drug from Eli Lilly (NYSE:LLY) may reset the bar for treating obesity and helping adults with type 2 diabetes lower their blood sugar.

The company recently released information from the results of a phase three trial on one of its new weight loss drugs called TRIUMPH-2, which contains retatrutide, a triple agonist drug that releases hormone receptors to suppress blood sugar, appetite, and more intensely target calorie burn.

The trial showed promising results, with participants who took a 12 milligram (mg) dose of retatrutide losing an average of 49.6 pounds, or 20.8% of their body weight.

Participants with a body mass index over 35% taking a 12 mg dose lost an average of nearly 61 pounds. By the conclusion of the study, 59.5% of participants taking a 12 mg dose of ratatrutide were no longer obese, according to the BMI threshold.

Here's how this news could shake up the obesity drug market.

Image source: The Motley Fool.

Retatrutide appears to outperform other weight-loss drugs

The trial had 1,152 participants who, at random, were given either a 4 mg, 9 mg, or 12 mg dose of retatrutide, while some were given a placebo or inactive treatment, to see how participants performed when they simply felt they were being given treatment.

Not only did participants in the study experience significant weight loss, but they also saw a reduction in their A1C levels, a measure of blood sugar and a key metric for people with diabetes.

Participants taking 9 mg and 12 mg doses of retatrutide reduced their A1C by an average of 1.6% and 1.5%, respectively, during the 80-week study.

"The vast majority of people with type 2 diabetes are also living with obesity, and treating the two together has always been a challenge," Juan P. Frías, M.D., a medical director, and principal investigator at the Los Angeles Institute for Metabolic Research, said in a statement.

He added: "In TRIUMPH-2, retatrutide reduced both weight and blood sugar substantially, with more than half of participants no longer qualifying as having obesity and up to 40% reaching an A1C in the normal range. Results such as these may change what we set out to achieve with a single therapy for adults living with type 2 diabetes and obesity."

Eli Lilly also said that retatrutide helped reduce pain for people with knee arthritis by up to 73%. People with moderate-to-severe sleep apnea also experienced roughly 60% fewer events.

Although tirzepatide (Zepbound), one of Eli Lilly's other weight-loss drugs currently available to the public with a prescription, has not been formally evaluated against retatrutide, its clinical trials showed that people with type 2 diabetes lost up to 15% of their body weight, according to NBC News.

Confirming what many suspected

Word of retatrutide's success got out long ago after previous trials, and rumors of its success have already sparked a massive black market trying to make copycat pills.

"This drug is going to be a blockbuster," Jayne Hornung, chief clinical officer for healthcare advisory firm MMIT, told Investor's Business Daily back in May, also describing the black market as "horrifying." "This is a game changer for the morbidly obese population."

Additionally, the results from this recent trial suggest retatrutide is more effective than other popular weight-loss drugs, including its current products on the market and competitors such as Wegovy and Ozempic.

Lilly said it plans to submit a biologics license application to the U.S. Food and Drug Administration in the first quarter of 2027.

While the successful trial results appear to be priced into the stock, retatrutide will make an already competitive sector even more competitive, if it hasn't already, considering what's going on in the black market.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool has a disclosure policy.