Shares of Insulet (PODD) and DexCom (DXCM), two companies that offer medical devices to treat diabetes patients, plunged on Tuesday after a study showed that a popular drug from Eli Lilly (LLY) significantly reduces the risk of developing type 2 diabetes.

According to results from a three-year study, patients with prediabetes who were overweight or obese had a 94% reduced risk of progression to type 2 diabetes after taking tirzepatide, the active ingredient in Eli Lilly’s injectable weight-loss drug Zepbound and diabetes treatment Mounjaro, compared with a placebo.

Blockbuster drug impacts growth prospects

The results of Lilly’s study show another benefit of tirzepatide and other drugs known as GLP-1 receptor agonists. While the growing list of positive effects will be welcome news for many patients, it could raise concerns for companies that make products to treat related conditions.

DexCom, a maker of continuous glucose monitoring (CGM) devices, saw its stock price fall in late July after it cut its revenue forecast for the current quarter and full year. The company said the lower forecasts were due to slower-than-expected new customer additions, which could be exacerbated as treatments from Lilly and pharmaceutical rivals reduce the risk of diabetes.

Concerns about user numbers have also weighed on insulin pump maker Insulet in recent weeks. Shares plunged on August 6 after the company said its growth trend may be slower than previously expected as fewer patients switch from competing products to its customers and the wider adoption of GLP-1 receptor agonists could add to the headwinds.

Share price development

After Lilly released the study results, Insulet shares plunged 6.9 percent on Tuesday, the weakest one-day performance of any stock in the S&P 500. DexCom shares weren’t far behind, falling 6.2 percent on the day.

Meanwhile, Lilly shares closed 3.1 percent higher after hitting a historic intraday high earlier in Tuesday’s trading session.