Eli Lilly has made history as the first healthcare company to achieve a $1 trillion market value, joining an elite group of companies primarily composed of tech giants.
Eli Lilly has become the first healthcare company to reach a market value of $1 trillion, marking a significant milestone in the pharmaceutical industry. This achievement places Lilly in an exclusive club that has been predominantly occupied by technology companies.
The company briefly surpassed the $1 trillion mark during morning trading before experiencing a slight retreat, with shares last trading around $1,048. Eli Lilly is only the second non-technology company in the United States to reach this coveted valuation, following Warren Buffett’s Berkshire Hathaway.
A remarkable rally of over 35% in Eli Lilly’s stock this year has been largely driven by the explosive growth of the weight loss market. The introduction of highly effective obesity treatments over the past two years has transformed this sector into one of the most lucrative areas within healthcare.
Sales of Lilly’s tirzepatide, marketed as Mounjaro for Type 2 diabetes and Zepbound for obesity, have now surpassed Merck’s Keytruda, making it the world’s best-selling drug. Although Novo Nordisk initially led the market, Mounjaro and Zepbound have since gained significant popularity.
In its latest quarterly report, Eli Lilly announced combined revenue exceeding $10.09 billion from its obesity and diabetes portfolio, which accounted for more than half of its total revenue of $17.6 billion.
“The current valuation points to investor confidence in the longer-term durability of the company’s metabolic health franchise. It also suggests that investors prefer Lilly over Novo in the obesity arms race,” stated Evan Seigerman, an analyst at BMO Capital Markets.
In October, Eli Lilly raised its annual revenue forecast by more than $2 billion at the midpoint, driven by surging global demand for its obesity and diabetes drugs. According to Wall Street estimates, the weight loss drug market is projected to reach a value of $150 billion by 2030, with Lilly and Novo together expected to control a significant portion of global sales.
Investors are now closely monitoring Lilly’s oral obesity drug, orforglipron, which is anticipated to receive approval early next year. Analysts at Citi noted that the latest generation of GLP-1 drugs has already proven to be a “sales phenomenon,” and orforglipron is well-positioned to capitalize on the groundwork laid by its injectable predecessors.
Eli Lilly is also set to benefit from a partnership with the Trump administration, which includes planned investments to enhance U.S. production capabilities. Analysts have suggested that while the pricing agreement with the White House may impact near-term revenue, it significantly broadens access to treatment, potentially adding as many as 40 million candidates for obesity treatment in the U.S.
In September, Eli Lilly announced a major investment in Houston, with CEO David Ricks joining Texas Governor Greg Abbott to reveal plans for a $6.5 billion manufacturing plant in the Generation Park development.
This historic achievement underscores Eli Lilly’s pivotal role in the healthcare sector and its potential for continued growth as it navigates the evolving landscape of obesity and diabetes treatments.
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