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By Patrick Wingrove and Bhanvi Satija

(Reuters) -Eli Lilly on Tuesday forecast 2024 profit above Wall Street estimates on soaring demand for its recently approved weight-loss drug, and said the treatment helped reduce symptoms of a common, difficult to treat fatty liver disease in a mid-stage trial.

The company said it expects 2024 revenue of $40.4 billion to $41.6 billion, and adjusted earnings of $12.20 to $12.70, putting the midpoint ahead of analysts’ estimates of $12.43 per share, according to LSEG data.  .

Sales of obesity drug Zepbound reached $175.8 million in the first few weeks of its launch, after it was approved by the U.S. Food and Drug Administration in November.

Shares of the Indianapolis-based drugmaker rose about 3% in premarket trading after gaining about 11% in January, making Lilly the eighth largest company in the U.S. by market capitalization and most valuable healthcare company.

“I guess, (I was) most surprised by the sales of Zepbound. I wouldn’t have expected near that much,” said Troy Harmon, Chief Investment Officer at Henssler Financial.

Lilly said it will expand manufacturing capacity, but expects demand for its diabetes and obesity drugs Mounjaro and Zepbound to outpace supply in 2024.

Explosive demand for Mounjaro, which had also been used off label for weight loss, and now Zepbound, has led to a buying spree of Lilly’s stock, propelling the drugmaker’s market value to over $600 billion.

The company and its main rival in the obesity market, Novo Nordisk, are both testing their treatments for other health benefits such as obstructive sleep apnea and chronic kidney disease, which could expand insurance coverage for the medicines.

Lilly said tirzepatide, the active ingredient in Zepbound and Mounjaro, met the main goal in a study for a type of fatty liver disease formerly known as NASH and now called metabolic dysfunction-associated steatohepatitis, or MASH.

Lilly said the drug helped up to 74% of patients achieve absence of the disease with no worsening of liver scarring at 52 weeks, compared to 13% of patients on placebo. A clinical trials database said patients in the study had stage 2 or 3 fibrosis.

Two analysts said they wanted to see more data on the benefit of tirzepatide on liver scarring. Lilly called the results “clinically meaningful” but did not provide further detail on whether they were statistically significant, they said.

Still, the data sent shares of other companies developing drugs for the fatty liver disease tumbling, including Madrigal Pharmaceuticals, Akero Therapeutics and 89Bio, which dropped between 19% and 22%.

The company has been investing in manufacturing facilities in the U.S. and Europe to ramp up supply of tirzepatide, announcing in November it would build its first plant in Germany for 2.3 billion euros ($2.47 billion).

Lilly reported sales of Mounjaro for the quarter rose to $2.21 billion from $279.2 million last year, easily outpacing expectations of $1.8 billion, according to BMO Capital Markets.

Fourth-quarter profit of $2.49 per share on an adjusted basis, beat Wall Street expectations by 27 cents.

(Reporting by Bhanvi Satija and Leroy Leo in Bengaluru and Patrick Wingrove in New York; Editing by Arun Koyyur and Bill Berkrot)