Eli Lilly becomes first drugmaker to hit $1 trillion market value on weight-loss drug boom – Firstpost

Eli Lilly on Friday became the first drugmaker to reach a market valuation of $1 trillion, joining an exclusive club long dominated by tech giants, highlighting its rise as a leader in the weight-loss drug market.

Lilly’s stock has risen more than thirty-five percent this year largely due to the explosive growth of its obesity treatment. Over the past two years, highly effective new drugs have transformed the weight loss field from a niche area into one of healthcare’s most lucrative markets.

While Novo Nordisk initially led the category, Lilly’s drugs – Monjaro and Zepbound – have rapidly gained popularity, and have overtaken their rival in prescriptions. Shares briefly hit a record high on Friday, trading up nearly 1 percent at $1,051.

Lilly is now trading at a premium valuation to big pharma companies, approximately fifty times expected earnings over the next twelve months, reflecting investor confidence in the continued demand for obesity treatments. Since Zepbound’s launch in late 2023, Lilly’s shares have climbed more than seventy-five percent, while the S&P 500 has gained fifty percent over the same period.

In its most recent quarter, combined revenues from Lilly’s obesity and diabetes portfolio exceeded $10.09 billion, accounting for more than half of its total revenues of $17.6 billion.

“Lilly joins a prestigious trillion-dollar market cap group as the investing public begins to fully appreciate the strong innovation Eli Lilly delivers to patients,” said Kevin Gade, chief operating officer of Lilly shareholder Bahl & Gaynor.

The company raised its annual revenue forecast by more than $2 billion in October, citing strong global demand for obesity and diabetes drugs. Analysts estimate that the weight-loss drug market could reach $150 billion by 2030, with Lilly and Novo expected to control the majority of global sales.

Investors are keeping a close eye on Lilly’s oral obesity drug orforglipron, which is expected to gain approval early next year. Citi analysts noted last week that the latest generation of GLP-1 drugs has already been a “sales phenomenon,” and orforgalipron could benefit from the success of its injectable predecessors.

Lilly is also set to benefit from a planned US investment deal with the Trump administration, designed to expand domestic production. Analysts said the White House’s pricing agreement may reduce near-term revenues, but it would significantly increase access, potentially giving access to as many as forty million American candidates for the obesity treatment.

“Lilly is starting to look like the ‘Magnificent Seven’ again,” said James Shin, director of biopharma equity research at Deutsche Bank, referring to the tech giants that have driven this year’s market gains. “At one time, it fell out of favor after disappointing headlines and earnings, but now it is ready to rejoin that circle, possibly even as an option for investors amid the recent concerns in AI stocks.”

However, analysts caution that Lilly’s future growth will depend on its ability to leverage its diverse pipeline and strategic deals to maintain pricing for Monjaro and Zepbound, scale up operations and offset potential margin pressures.