Eli Lilly (NYSE:LLY), as a pharma giant, offers investors a certain sense of safety in any market environment. This is because, at all times, patients need their medical treatments. But this company has also presented investors with a spectacular growth opportunity in recent years — and this is in the form of its weight loss drug portfolio.
Lilly is the maker of tirzepatide, a drug sold under the name Mounjaro for type 2 diabetes and as Zepbound for weight loss. These injectable drugs, along with the recently approved oral weight loss drug, Foundayo, have been driving double-digit revenue growth at Lilly.
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This trend continued into the third quarter, as earnings beat expectations and the company lifted its full-year forecast. Now, after Lilly’s latest explosive earnings report, is it too late to buy the stock? Let’s find out.
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As mentioned, Lilly is a pharma giant with a broad range of commercialized drugs across treatment areas. But in recent years, the weight loss drug portfolio has stood out. Demand has been incredibly strong for these drugs, even surpassing supply at certain points. Fellow pharma giant Novo Nordisk originally led this market with its blockbusters, Ozempic and Wegovy, and these products continue to generate significant growth — but Lilly progressively gained market share and today holds 63% of the U.S. market.
Lilly’s and Novo’s drugs are in the class known as GLP-1, and they work by interacting with hormonal pathways involved in digestion. By doing so, they help control appetite and insulin levels. They are self-administered by injection weekly. The companies also just launched oral weight loss drugs this year, and these represent a way to expand the patient population to include those who couldn’t or wouldn’t take an injectable.
All of this has resulted in significant earnings growth for Lilly over the past couple of years, and the momentum continued into the third quarter. The company reported a 39% increase in revenue to more than $24 billion, driven by the weight loss portfolio. Mounjaro sales soared 65% to more than $10 billion, while Zepbound sales climbed 49% to $5.3 billion.
Meanwhile, 40% of new patients starting an oral obesity medicine opted for Foundayo, and new patient numbers doubled from the previous quarter.
