Eli Lilly and Co (NYSE:LLY) shares are down on Thursday. The company released news regarding its investigational drug, retatrutide, which has shown promising results in clinical trials.

Eli Lilly Retatrutide Shows Strong A1C Reduction And Weight Loss

Retatrutide is an investigational once-weekly triple hormone receptor agonist that activates the body’s receptors for glucose-dependent insulinotropic polypeptide (GIP), glucagon-like peptide-1 (GLP-1), and glucagon.

In the latest updates, Eli Lilly announced that retatrutide significantly lowered A1C (blood sugar) levels by an average of 1.7% to 2.0% over 40 weeks in the TRANSCEND-T2D-1 trial.

Participants taking the 12 mg dose also lost an average of 36.6 lbs (16.8%), with no plateau in weight loss observed throughout the trial duration.

Eli Lilly Phase 3 Program Expands Across Large Patient Population

The trial, which began in 2024, enrolled over 2,050 participants and is part of a larger Phase 3 clinical program assessing retatrutide’s efficacy for treating type 2 diabetes.

Retatrutide also showed clinically meaningful improvements from baseline across key cardiovascular risk factors, including non-HDL cholesterol, triglycerides, and systolic blood pressure.

Detailed results are expected to be presented at the American Diabetes Association Scientific Sessions in June, with further data anticipated over the next year.

HSBC Turns Bearish, Flags Valuation Concerns

On Tuesday, HSBC analysts turned bearish on Eli Lilly, suggesting that the weight-loss market is overly optimistic regarding revenue potential.

HSBC downgraded Eli Lilly's stock to a sell-equivalent last April, citing excessive optimism and unattractive risk-reward. Four months later, they upgraded it to hold, noting potential upside if the obesity market maintains price discipline. However, they have now reassessed, stating that the stock is "priced to perfection" and the risk-reward is no longer balanced.

LLY Stock Price Activity: Eli Lilly shares were down 0.56% at $913.59 at the time of publication on Thursday, according to Benzinga Pro data.

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