Eli Lilly (NYSE:LLY) has been one of the better-performing pharma companies of 2020. Year to date, the pharma giant's stock is up by 24.7%, while the SPDR S&P Pharmaceuticals ETF -- an industry benchmark -- is down by 5.5%.

There are several reasons Eli Lilly has been beating the market of late. The ongoing COVID-19 pandemic actually improved the company's financial performance during the first quarter. I think Eli Lilly will continue to outperform for the following three reasons. 

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1. Continued success in the diabetes market 

According to the U.S. Centers for Disease Control and Prevention, roughly 34.2 million Americans have diabetes, and 88 million have pre-diabetes. Older Americans -- who are more likely to have chronic health conditions, including diabetes -- are making up an increasing percentage of the total population. There is a real need for products to help patients manage the condition. Thanks to its robust lineup of diabetes medicines, Eli Lilly is unquestionably a leader in this market.

One of the company's best-selling diabetes drugs is Trulicity, which helps patients control their blood sugar levels. During the first quarter, Trulicity's revenue came in at $1.2 billion, representing a 40% year-over-year increase.

Eli Lilly offers several other diabetes products, including Humalog, Humulin, and Basaglar. Further, the company has several diabetes candidates in the pipeline. For instance, there is tirzepatide, which the company is developing as a treatment for type 2 diabetes. Thanks to these factors, I expect Eli Lilly to remain a leader in this market for many years to come. 

2. Positive results from a pivotal clinical study 

Eli Lilly recently reported positive results from a phase 3 clinical trial for cancer treatment Verzenio. The trial investigated the efficacy of Verzenio in combination with standard adjuvant endocrine therapy in treating early-stage breast cancer. The study found that this dual treatment significantly reduced the risk of death or recurrence in early-stage breast cancer patients when compared with standard endocrine therapy alone. (Endocrine therapy seeks to slow or stop the growth of cancer, while adjuvant endocrine therapy is typically administered after the primary treatment and seeks to lower the chances that the cancer will come back.)

These results were impressive for two major reasons. 

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Image source: Getty Images.

First, pharma giant Pfizer announced in late May that its cancer drug Ibrance had failed to prove effective in a clinical study of early-stage breast cancer patients. Second, although there are scores of breast cancer treatments on the market, there's still a need in the early-stage space. According to Eli Lilly, about 30% of patients who suffer from some forms of early-stage breast cancer are at risk of recurrence.

Verzenio will likely earn a new indication from the U.S. Food and Drug Administration (FDA) for use in treating early-stage breast cancer. The drug's sales are already growing rapidly; during the first quarter, Verzenio's revenue was $188 million, a 72% increase compared with the prior-year quarter. This new indication will only make the drug more lucrative. 

3. Involvement in the fight against COVID-19 

Eli Lilly is hunting for a treatment for COVID-19. The company started three separate clinical trials for investigational treatments for the disease last month alone.

On June 1, Eli Lilly kicked off a phase 1 clinical trial for a potential COVID-19 antibody treatment called LY-CoV555. This study will test the antibody's safety and tolerability in hospitalized COVID-19 patients. Eli Lilly initially said it expected results from this clinical trial to come in by the end of June.

A week later, the pharma giant began a second clinical trial for another potential antibody treatment, called JS016. Eli Lilly is collaborating on this project with China-based Junshi Biosciences. The phase 1 study will test JS016's safety, tolerability, immunogenicity (ability to trigger an immune response in the body), and pharmacokinetics (how the body processes the treatment) in healthy volunteers who haven't been diagnosed with COVID-19.

Lastly, Eli Lilly began a phase 3 clinical trial for Olumiant (baricitinib) -- which is already approved for rheumatoid arthritis -- as a treatment for severe cases of COVID-19. The company thinks Olumiant could prevent cytokine storms, which are potentially deadly immune reactions some COVID-19 patients experience. For this trial, Eli Lilly will enroll 400 hospitalized COVID-19 patients. Each patient will receive oral doses of Olumiant or a placebo for 14 days.

Of course, there's no guarantee that Eli Lilly's clinical trials for potential COVID-19 treatments will yield positive results. However, Eli Lilly is a well-established pharma giant with several blockbuster products and the funds necessary to support its operations. For investors looking to invest in "coronavirus stocks," Eli Lilly is a much safer bet than most clinical-stage biotech companies that are currently looking to develop vaccines or treatments for COVID-19. 

The key takeaway

It is worth noting that Eli Lilly's lineup goes beyond its diabetes products. For instance, the company's immunosuppressant Taltz and cancer treatments Alimta and Cyramza have strong and growing sales. Eli Lilly also has a pipeline of more than two dozen products from which it can continuously replenish its lineup . Thanks to all these factors, I think Eli Lilly is positioned to continue delivering strong financial results. Its stock will likely go on outperforming the market in the long run. In short, I think Eli Lilly is a pharma stock worth buying today.