SHANGHAI (Reuters) - Eli Lilly ( LLY ) said on Tuesday its diabetes drug tirzepatide has received approval from Chinese regulators, setting up intensifying competition with its Danish rival Novo Nordisk in the key Asian market.

Novo Nordisk's popular diabetes drug Ozempic won approval from China in 2021 and the company saw sales of the weekly injection in the greater China region that includes Hong Kong and Taiwan double to 4.8 billion Danish Krone ($698 million) last year.

Eli Lilly ( LLY ) did not say when sales would begin in China or how many doses would be supplied.

Tirzepatide is the active ingredient in the U.S. firm's diabetes drug Mounjaro and weight-loss drug Zepbound.

Eli Lilly ( LLY ) and Novo Nordisk are racing to increase production in a weight-loss market estimated to reach at least $100 billion globally by decade's end. Both companies' obesity treatments belong to a class of drugs originally developed for diabetes known as GLP-1 agonists.

GLP-1 drugs have been shown to help patients lose on average as much as 20% of their weight, fuelling unparalleled demand.

Novo Nordisk expected in March that its weight-loss drug Wegovy would be approved for sale in China this year and launched with limited supply in the country, which experts estimate has the world's highest number of people who are overweight or obese

Skyrocketing demand for Zepbound drove Eli Lilly ( LLY ) to raise its annual sales forecast by $2 billion last month.

The U.S. Food and Drug Administration said last month that most doses of Mounjaro and Zepbound would be in limited supply through the second quarter of this year due to increased demand.

Mounjaro has been approved in the U.S. since 2022 for patients with type-2 diabetes to control their blood sugar levels. It was approved in the U.S. for weight loss under the brand name Zepbound late last year.

($1 = 6.8673 Danish crowns)