Why Eli Lilly stock beat the market today while ResMed and AdaptHealth fell | Motley Fool

For both the biotechnology and pharmaceutical industries, what happens in the laboratory is critical to success (or failure, on the other hand).

Some good news from a clinical trial he conducted Eli Lilly (for me 0.54%) The pharmaceutical giant’s stock price strengthened (by 0.5%) on Wednesday, leaving several rivals in the dust. These included hardware makers Res Med (RMD -5.97%)whose stock took a 6% hit, and Health adaptation (AHCO -1.87%)With a decline of approximately 2%.

One very useful molecule

Before the market opened, Eli Lilly announced that its molecule tirzepatide met its primary endpoints in a set of Phase 3 clinical trials. The studies aim to judge its effectiveness in treating obstructive sleep apnea (OSA), a common disorder in which people have difficulty breathing properly during sleep.

The company said that the drug terzepatide has proven its ability to significantly reduce the apnea-hypopnea index (AHI) compared to placebo. The AHI, which measures how frequently a patient’s breathing is restricted or obstructed, is an important measure of the severity of the condition.

Tirzepatide is the basis for Mounjaro and Zepbound, the pharmaceutical giant’s FDA-approved diabetes and weight loss drugs. along with Novo NordiskThe very popular Ozempic and Wegovy seem to have properties that could be useful in treating other diseases. Both Eli Lilly and Novo Nordisk have been eagerly looking at such properties.

Eli Lilly’s good news was not well received by investors in companies focused on sleep apnea. ResMed is particularly at risk, as its main focus is on products for this disorder and related respiratory pain such as Chronic obstructive pulmonary disease (COPD). AdaptHealth is also active in these sectors.

In its press release touting the results of Terzpatide, Eli Lilly noted that 80 million adults in this country are affected by at least moderate forms of sleep apnea. However, 85% of these cases are not diagnosed, and therefore many infected people do not receive any treatment.

“Addressing this unmet need directly is critical, and while there are drug treatments for excessive sleepiness associated with sleep apnea, terizpatide has the potential to be a first-line drug treatment,” the company quoted Senior Vice President of Product Development Jeff Emick as saying. for the underlying disease.”

It’s just the beginning

We’re just at the beginning of a long line of investigations into what molecules like tirzepatide and semaglutide (the basis of Ozempic and Wegovy) can do to treat diseases other than diabetes and obesity. If any drug company is going to discover new, profitable treatments, it’s the well-capitalized and cash-rich Eli Lilly. Investors in smaller competitors are right to worry about this.