Eli Lilly on Tuesday said its highly popular drug used for weight loss and diabetes showed promise as a treatment for fatty liver disease in a mid-stage trial. 

The initial study results add to a long list of potential health benefits of the treatment, known as tirzepatide, besides helping patients shed significant pounds and regulate blood sugar under the drug's brand names, Zepbound and Mounjaro, respectively. Those additional benefits could potentially expand the limited insurance coverage for weight loss drugs, most of which cost close to $1,000 per month. 

The pharmaceutical giant said in its fourth-quarter earnings release that tirzepatide showed positive results in a phase two trial as a treatment for a serious form of liver disease called metabolic dysfunction-associated steatohepatitis, or MASH.

There are currently no cures or medicines available to directly treat MASH. The condition is characterized by excess fat build-up and inflammation in the liver and can lead to liver scarring, also known as fibrosis. An estimated 3% to 5% of adults in the U.S. are affected by MASH, according to some studies. 

The trial followed around 190 adults with MASH with severe stages of liver scarring, Eli Lilly executives said on an earnings call Tuesday.

At all dose sizes, tirzepatide met the trial's main goal of helping patients become free of the disease with no worsening of liver scarring compared to people who did not receive the treatment, according to the company's earnings presentation. 

For example, around 74% of patients who received the highest tirzepatide dose of 15 milligrams became free of MASH with no worsening of liver scarring after a year, compared to around 13% of those who received a placebo. 

It was less clear how much the drug reduced liver scarring, which was the second aim of the trial. Eli Lilly did not disclose whether tirzepatide met that goal, but the company said the drug's effect on decreasing liver scarring was "clinically meaningful" across all dose sizes. 

Eli Lilly is "equally encouraged" by tirzepatide's results in reducing liver scarring, the company's chief scientific officer Dan Skovronsky said on the call. 

"There's nothing bad in the data that would stop us from going to phase three," he added. "I think having a positive phase two trial here with really meaningful data in MASH obligates us to think about next steps." 

He noted that adverse events were consistent with other studies on tirzepatide in patients with obesity and diabetes, without providing further details. Previous trials on Zepbound showed that patients experienced diarrhea, nausea and vomiting, among other symptoms.

Eli Lilly will present the full results from the phase two trial at a medical conference later this year.

Leerink Partners analyst David Risinger called the initial trial results "positive" in a research note Tuesday. He said a larger and longer phase three study could increase the odds of tirzepatide causing a statistically significant decrease in liver scarring.

Tirzepatide works by activating two naturally produced hormones in the body: glucagon-like peptide-1, known as GLP-1, and glucose-dependent insulinotropic polypeptide, or GIP.

The combination is said to slow the emptying of the stomach, making people feel full for longer and suppressing appetite by slowing hunger signals in the brain.

Several other drugmakers are trying to develop treatments for MASH. 

They include Eli Lilly's main rival Novo Nordisk, which is studying semaglutide, also known as Wegovy for weight loss and Ozempic for diabetes, in a late-stage trial in MASH. But a mid-stage trial on semaglutide in MASH patients had mixed results, according to data released in 2022. 

Unlike tirzepatide, semaglutide only targets GLP-1.