By Bhanvi Satija and Leroy Leo

(Reuters) -Eli Lilly said on Thursday its experimental obesity drug helped patients reduce 26.6% of weight, on average, across two late-stage studies after intensive lifestyle changes or with continued treatment, before they stopped taking the drug.

Lilly is testing the drug, known as Mounjaro or tirzepatide, in the trials in patients who were obese or overweight but did not have type 2 diabetes.

The drug is expected to become a blockbuster treatment if approved for obesity, and is a key growth driver for Lilly.

The data improves Lilly's competitive advantage in an "increasingly crowded" obesity treatment space, which includes rivals including Novo Nordisk, Pfizer and Amgen, Cantor Fitzgerald analyst Louise Chen said.

Shares of Danish drugmaker Novo Nordisk, that sells the obesity drug Wegovy, pared gains following the data.

In the first study, Lilly's drug helped reduce patients an additional 21.1% of weight, on average, after 12 weeks of lifestyle changes, which included a low-calorie diet and exercise, when compared to placebo.

In the second study, Lilly's drug helped patients reduce 21.1% weight, on average, when compared to placebo at the end of a 36-week period.

Before stopping treatment with the drug, patients lost an additional 6.7% of weight in the second study at the end of 88 weeks.

The company said both the trials met their secondary goals and overall safety of the drug was similar to that observed in previous studies.

In April, Lilly said data from a large trial showed that a high dose of the drug helped people with type 2 diabetes, who were also obese or overweight, to lose nearly 16% of their body weight.

The company reported last year that the drug, when given to people who were obese or overweight but did not have diabetes, led to a weight loss of 22.5%, or about 52 pounds (24 kg).

(Reporting by Bhanvi Satija and Leroy Leo in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)