Eli Lilly Just Delivered Fantastic News to Shareholders

by

Eli Lilly stock jumped 10% this week after the company released a very positive earnings report, and analysts believe the stock could continue to rise. In recent years, Eli Lilly has offered investors a good combination of stability – typical of pharmaceutical companies – and significant growth potential.

Lilly’s success is impressive. With a wide range of established medicines, it’s considered a reliable investment because people will always need their prescriptions, even during tough economic times. Plus, Lilly is now a major player in the rapidly growing weight loss drug market, which experts predict will be worth almost $100 billion within the next few years.

Lilly’s stock has soared – it’s increased by 220% in the last three years – as the company’s sales have grown. Recently, Lilly also announced very positive news for its investors.

Lilly’s weight loss drugs

Let’s start by examining Lilly’s most valuable asset: its weight loss drugs. The company currently sells two medications, Mounjaro and Zepbound (both based on tirzepatide), that are gaining attention for helping people lose weight. Mounjaro was initially approved in 2022 to treat type 2 diabetes, but doctors have also been prescribing it to patients seeking weight loss. Zepbound received specific approval for weight loss in 2023.

These products have significantly boosted Lilly’s growth. Just last quarter, they generated over $11 billion in revenue. Mounjaro sales increased by 110%, and Zepbound sales jumped 123%, the company reported this week.

These popular drugs, called GLP-1s, work with the body’s natural digestive hormones to manage blood sugar and reduce appetite. They compete with drugs like Ozempic and Wegovy, made by Novo Nordisk, which are used to treat type 2 diabetes and help with weight loss.

Lilly recently shared some exciting news with its investors. They’ve reached an agreement with President Trump to reduce the cost of their weight loss medications for people with Medicare. Starting in April, Medicare will begin covering these drugs for the first time ever.

Loading widget...

The impact of Medicare coverage

While a price decrease might slow growth, Eli Lilly CEO Dave Ricks recently told CNBC that expanding Medicare coverage could significantly boost the number of people who could benefit from GLP-1 medications. He believes around 30 million Americans could qualify for these treatments.

Even if the price of weight loss drugs goes down, overall sales could still increase if more people start using them. This depends on whether patients with Medicare choose to try a weight loss treatment, and if their doctors prefer to prescribe drugs made by Lilly. There’s good reason to believe this will happen, as many patients have been waiting for Medicare coverage to make treatment affordable. Lilly is already the market leader, capturing 60% of sales, which shows doctors trust and are willing to continue prescribing their medications.

A potential approval ahead

Adding to this, Eli Lilly could soon strengthen its position in the weight loss market. The company’s experimental weight loss drug, orforglipron, is currently under review by regulators, who are expected to make a decision by April 10th, according to a Reuters report.

Currently, most GLP-1 medications are given as injections. Novo Nordisk’s oral semaglutide was a recent addition, but orforglipron could be different because it doesn’t require any changes to your diet. This could be a major benefit, as people who prefer taking a pill usually want something easy and convenient.

Look, I’ve been watching Lilly for a while now, and while these price adjustments might sting a little in the short term, I actually think they’re setting the stage for bigger things. Increased sales volume could easily offset any initial losses, and potentially even fuel more growth down the road. It feels like Lilly’s growth trajectory is about to shift into a really positive phase, and that’s exactly what I like to see as an investor.

Read More

2026-02-05 22:14