** Citi says investor concerns over dysesthesia, a tingling sensation linked to Eli Lilly's LLY.N experimental obesity drug retatrutide, are "overdone", adding the signal is "real but contextually benign"

** In recent late-stage data, patients on the highest dose of retatrutide lost about 28% of their body weight over 80 weeks, with dysesthesia seen in about 12.5% of patients at that dose

** Brokerage says cases in late-stage studies were mostly mild to moderate, mostly resolved during treatment and rarely led to discontinuation

** Adds that the issue is "not a retatrutide-specific liability" but a known class effect seen with other weight-loss drugs

** LLY is expected to present additional safety and secondary endpoint data at a diabetes conference from June 5 to 8, which could provide further clarity on the drug

** Citi says "investors should be focused elsewhere," pointing to additional data at the upcoming diabetes conference that could "further differentiate retatrutide from marketed products" and support broader use

** Brokerage says stronger data beyond weight loss could "add meaningfully to Street estimates," reiterates a "buy" rating and PT of $1,500