Eli Lilly ‘s expanding obesity drug pipeline is giving us little reason to take profits at this point — even after a massive run to record highs. “It’s a parabolic spike. I don’t buy parabolas,” Jim Cramer said on ” Squawk on the Street ” on Monday. “But I can’t sell it. I’m just not going to take that gain.” Jim wants to let Lilly’s rally ride for now, noting the Club stock is up 35% from its year-to-date lows set in late April and up 85% from its 52-week low of nearly $624 from last August. Shares of Eli Lilly traded at all-time highs during Monday’s session after the company unveiled new data on its next-generation obesity drug, retatrutide, at the American Diabetes Association conference in New Orleans on Saturday. One of the most encouraging findings was the lower 4-milligram dose of retatrutide, which produced roughly 19% weight loss — comparable to the highest dose of Lilly’s blockbuster obesity treatment Zepbound. The Zepbound’s max dose is 15 milligrams. Both are injectables. Another difference is that Zepbound is what’s called a dual agonist drug. It activates two hormones — GLP-1 to reduce hunger and GIP to help kick-start insulin. Retatrutide is a triple agonist, adding glucagon for a metabolism boost. Wegovy from rival Novo Nordisk only targets GLP-1. Wegovy is both an injectable and a pill. Lilly’s weight loss pill is Foundayo, which is off to a strong start. The results reinforced our belief that Eli Lilly is widening its lead in the obesity drug market. “I think the majority view is that Lilly is pulling away, kind of Secretariat-like,” Jim said, referring to the legendary racehorse. Investors are increasingly focusing on the strength of Lilly’s pipeline. Shares are up about 8% year to date, while Novo Nordisk stock is down roughly 18% over the same stretch. Wall Street analysts were similarly upbeat, arguing that retatrutide’s combination of strong efficacy and favorable tolerability could significantly expand its commercial opportunity. Goldman Sachs said Lilly’s obesity pipeline highlights a “rapidly evolving next-gen innovation engine.” Barclays wrote that retatrutide “delivered on the promise of moving the goal posts in what’s possible in obesity pharmacotherapy.” Lilly’s opportunity extends far beyond weight loss alone, pointing to growing evidence that GLP-1 drugs could benefit patients with conditions ranging from sleep apnea to cardiovascular disease. “They can actually do a lot more,” Jim said. “You’re already seeing it in sleep apnea, but you’re going to see so much heart, so much blood pressure, and maybe even so much Alzheimer’s.” Jim also pushed back on efforts by some employers and insurers to limit coverage of GLP-1 therapies because of their cost, arguing that the drugs’ long-term health benefits could outweigh the near-term expense. “The companies that are cutting back are being foolish,” Jim said. “Don’t save on this. Save on almost anything else. This is worth it.” (Jim Cramer’s Charitable Trust is long Eli Lilly. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
