Eli Lilly’s next-generation obesity drug showed promising results in a late-stage trial, with patients experiencing up to 28.7% weight loss. The drug also reduced knee arthritis pain and met other key trial goals. Shares of Eli Lilly rose more than 3% on the news, positioning the drug as a rival to weight loss surgery.

The drug, retatrutide, is part of Eli Lilly’s strategy to maintain its market share in the weight loss and diabetes drug industry, estimated to be worth $100 billion by the 2030s. Retatrutide works by mimicking three hunger-regulating hormones, making it more effective at reducing appetite and promoting weight loss compared to existing treatments.

Despite the positive results, some patients experienced side effects such as nausea, diarrhea, vomiting, and nerve sensations. The drug’s tolerability data was somewhat worse compared to Eli Lilly’s existing weight loss drug, Zepbound, but overall, the results were impressive. Eli Lilly plans to report findings from additional phase three trials by the end of 2026.

As Eli Lilly gains traction in the weight loss drug market, its main competitor, Novo Nordisk, is also making moves to stay in the game. Novo Nordisk recently acquired an experimental drug with similar weight loss and blood sugar regulating properties to retatrutide. However, Novo Nordisk’s treatment is still in early development stages and will take several years to reach patients.

Read more at CNBC: Eli Lilly’s weight loss drug retatrutide clears first late-stage study