Eli Lilly and CoThursday’s announcement by the FDA that the potential blockbuster drug for obesity had reached a target of helping patients to lose 20% or more in a final-stage clinical trial was a positive sign. The shares of the company jumped about 3%.

American drugmaker, U.S. Drugmaker reported earnings for the first quarter that exceeded Wall Street expectations.

Tirazide, a drug being investigated for treatment of type 2 diabetes and obesity, showed a 22.5% reduction in weight among adults.

Mohit Bansal from Wells Fargo stated in a note that “the data likely validates Street believing that tirzepatide would become a dominant market player in the obesity marketplace.” He added that he anticipates $4 billion of peak sales.

According to Vamil Dvan, a Mizuho Securities analyst, the drug could be “a multibillion-dollar solution” for weight loss and diabetes.

Additionally, the company said it expects to complete initial submission of data on its experimental Alzheimer’s treatment, donanemab, to the U.S. Food & Drug Administration in the current quarter as it seeks accelerated approval.

Lilly delayed the Donanemab Application by a quarter to February 2022, in response to the U.S. proposal to severely restrict Medicare coverage of drugs within its class.

In April, the U.S. Centers for Medicare & Medicaid Services decided to allow standard reimbursement only for Alzheimer’s drugs approved under the traditional FDA process based clear proof of patient benefit, rather than removal of brain plagues or other secondary goals that might slow cognitive decline.

After controversial approval of Aduhelm, a similar Alzheimer’s medication by Biogen Inc.

Lilly believes that FDA will decide on donanemab early in 2023. That would be very close to the time when data is expected from its later-stage studies, Daniel Skovronsky, chief scientific officer, stated.

He said that his company was confident the timing will allow them to have parallel talks with CMS about outright coverage, expedited review and full FDA approval.

Still, Mizuho said that there are “nearly no expectations” for donanemab sales this year and next due to the difficulties Biogen encountered on the reimbursement side.

Refinitiv IBES data shows that Lilly’s adjusted first-quarter earnings were $2.77 per a share. Analysts had expected $2.32.

The company now expects to earn $8.15- $8.30 per share for full year adjusted earnings, which is lower than its previous forecast of $8.50-8.65 per share. This may be due in part to changes to the accounting system that it uses to report results.