Eli Lilly and Company ( LLY ) shares are trading higher Monday. The upward momentum in the stock comes after the FDA approved the company’s Zepbound, a weight loss drug designed to treat moderate-to-severe obstructive sleep apnea in adults with obesity.

What To Know: After the market close on Friday, Eli Lilly ( LLY ) announced FDA approval of Zepbound (tirzepatide) as the first prescription medicine for adults with moderate-to-severe obstructive sleep apnea and obesity.

Obstructive sleep apnea is estimated to affect 50 million to 80 million people in the U.S., with an estimated 20 million suffering from moderate-to-severe forms. Clinical trials demonstrated the drug's efficacy, with nearly half of patients on the highest dose showing significant improvement in their apnea-hypopnea index, a primary diagnostic metric.

“Today, many cases of OSA go undiagnosed and untreated, leaving millions at risk for serious health consequences,” said Patrik Jonsson, executive vice president, and president of Lilly Cardiometabolic Health and Lilly USA. “Zepbound is the first medication that significantly improves moderate-to-severe OSA and aids in long-term weight loss in adults with obesity.”

The approval is expected to impact insurance coverage for Zepbound, potentially expanding Medicare benefits for obesity-related treatments. In addition to improved obstructive sleep apnea symptoms, adults on Zepbound lost an average of 45 lbs (18%) of their body weight in Phase 3 trials.

The approval also positions Eli Lilly ( LLY ) ahead of competitors like Novo Nordisk, whose Wegovy lacks approval for sleep apnea. The company's ongoing $3 billion investment in manufacturing capacity underscores its focus on meeting demand for its diabetes and obesity treatments.

Eli Lilly ( LLY ) reported third-quarter revenue of $11.44 billion in October, reflecting a 20% year-over-year increase. Zepbound accounted for approximately $1.26 billion in total revenue during the quarter.

LLY Price Action: Eli Lilly ( LLY ) shares were up 3.11% at $791.63 at the time of writing, according to Benzinga Pro.

Read Next:

Pfizer’s Progress on C. diff Vaccine and Pneumococcal Shot Wins Analyst Conviction

Image Via Shutterstock.