Eli Lilly's (NYSE: LLY) broad portfolio of drugs has helped the company's earnings climb over the years -- and in recent times, two products in particular have supercharged growth. The big pharma company sells Mounjaro and Zepbound, both prescribed for weight loss, and demand has been surpassing supply.
Pharmaceutical companies are generally viewed as safe investments -- due to people needing their medications no matter what the economy is doing. This often results in a certain level of earnings stability. Lilly offers investors this investment profile, and thanks to its weight-loss drugs, it also brings the revenue growth you would expect from a more traditional growth stock. How has that translated into stock performance? Let's find out.
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Blockbuster drug Mounjaro
If you'd invested $10,000 in Eli Lilly stock five years ago, you would have $65,900 today. That's a gain worthy of a top growth player. Lilly managed to draw the attention of a wide range of investors -- from cautious to aggressive -- as Mounjaro became a blockbuster drug. Now, the recently launched Zepbound is following in those footsteps.
In the most recent quarter, Mounjaro generated more than $1.8 billion in revenue, while Zepbound brought in about $517 million during its first full quarter of commercialization. The good news for shareholders and potential shareholders is that these gains are likely to continue. As mentioned, demand for these products is high, with Lilly and rival Novo Nordisk unable to keep up so far. (Both are ramping up production, though, which should help earnings climb further.)
According to Goldman Sachs Research, the weight loss drug market may reach $100 billion by the end of the decade. Meanwhile, Lilly has other weight-loss candidates in late-stage development, and if all goes well there, the company's status as a weight-loss drug giant may continue for quite some time.
All this means that Eli Lilly stock could continue to reward investors over the long term.
