A sign with the company's logo sits outside Eli Lilly's headquarters in Indianapolis, Indiana, on March 17, 2024.
Scott Olson | fake images
Eli Lilly reached a market capitalization of $1 trillion on Friday, the world's first healthcare company to join the exclusive club dominated by technology companies.
Eli Lilly briefly hit the $1 trillion mark in morning trading before pulling back. It was last trading around $1,048 per share. Eli Lilly is the second non-tech company to reach the coveted $1 trillion mark in the US after Warren Buffett. Berkshire Hathaway.
The drugmaker's shares have risen more than 36% this year as investors applaud the gains it has made over its main rival. Nordisk in the GLP-1 drug space. Shares of the Indianapolis, Indiana-based company have capitalized on the growing popularity of its weight-loss shot Zepbound and diabetes treatment Mounjaro.
Eli Lilly shares have soared thanks to the success of its drugs Mounjaro and Zepbound. Demand is expected to grow as approvals for treatment uses and insurance coverage expand.
The two drugs have fueled surprising sales growth for Eli Lilly. Last month, the drugmaker said Mounjaro earned $6.52 billion in revenue in the third quarter, an increase of 109% from a year earlier. Meanwhile, Zepbound posted $3.59 billion in sales during the period, an increase of 184% from the prior-year period.
Demand for these treatments will only grow as approvals for their use and insurance coverage expand. Additionally, the drugmaker expects an oral version of its popular medications to hit the market next year, which could give patients a more convenient option than an injection that is easier for the company to produce.
Eli Lilly is likely to remain a dominant player in the weight-loss drug market, which some analysts believe could be worth more than $150 billion by the early 2030s.
But despite its recent struggles and leadership changes, Novo Nordisk remains a formidable rival to Eli Lilly in this space. Pfizer also took a step forward in the market when it won a $10 billion bidding war with Novo Nordisk for anti-obesity drug maker Metsera earlier this month.
The runaway success of Zepbound, Mounjaro
Eli Lilly, a pharmaceutical chemist and union veteran of the American Civil War, founded his eponymous company in 1876. It has long been at the forefront of diabetes treatment, introducing the world's first commercial insulin in 1923.
Eli Lilly became a publicly traded company on the New York Stock Exchange in 1952 and for decades relied on a series of highly successful products to drive much of its profits and revenue. That included insulins, the antidepressant pill Prozac and the first polio vaccine.
A Zepbound injection pen from Eli Lilly & Co., March 28, 2024.
Bloomberg | Bloomberg | fake images
Eli Lilly hit the jackpot with the May 2022 approval of tirzepatide for diabetes, sold as Mounjaro. It began competing with Ozempic, Novo Nordisk's diabetes injection, which had entered the market a few years earlier.
But Eli Lilly brought a new way to treat diabetes and, eventually, obesity. Tirzepatide works by mimicking two hormones produced in the intestine called GLP-1 and GIP. GLP-1 helps reduce food intake and appetite. GIP, which also suppresses appetite, may also improve the way the body breaks down sugar and fat.
Meanwhile, Novo Nordisk's semaglutide, the active ingredient in Ozempic and its weight-loss drug Wegovy, only targets GLP-1.
Mounjaro achieved “blockbuster” status, meaning it generated more than $1 billion in annual sales, during its first full year on the market. Eli Lilly then won approval in late 2023 for tirzepatide as an obesity treatment, which is sold as Zepbound and now competes with Novo Nordisk's Wegovy.
By 2024, Mounjaro earned $11.54 billion in sales, while Zepbound posted $4.93 billion in revenue.
