Eli Lilly (LLY +4.14%) manufactures a drug called tirzepatide, a GLP-1 dual receptor agonist, which it sells as Mounjaro for treating type 2 diabetes and Zepbound for weight loss. Tirzepatide became the world's best-selling drug in the third quarter. With year-to-date sales of $24.8 billion, it surpassed Keytruda, a blockbuster cancer immunotherapy drug made by pharmaceutical giant Merck.
Considering the stunning achievement, is this a good time to invest $1,000 into Eli Lilly? Let's take a closer look.
NYSE: LLY
Key Data Points
Third-quarter sales of Mounjaro and Zepbound combined were $10.1 billion, more than double the $4.4 billion they brought in during the third quarter of 2024. (Keytruda sales were $8.1 billion in the third quarter.) Sales of Mounjaro rose 109% in the quarter, while Zepbound sales rocketed 184% higher.
Revenue growth from tirzepatide is driving Lilly's top line. Overall revenue in the third quarter rose 54% to $17.6 billion. Net income more than quintupled in the quarter, from $1.1 billion to more than $6.1 billion. Similarly, non-GAAP (adjusted) earnings per share shot up from $1.18 to $7.02. Lilly beat analysts' revenue expectations by 9% and their consensus earnings forecast by 19%.
Lilly said it expects full-year revenue of $63 billion to $63.5 billion, just a bit higher than the prior guidance range of $60 billion to $62 billion.
The company continues to expand access to Zepbound. It recently announced a partnership with retail giant Walmart, allowing patients to pick up orders made through Lilly's online service directly at the retailer's Supercenters. It will cut the list price of the obesity medication in half for these customers -- to as low as $349 a month. The agreement is a critical inroad to direct-to-consumer service for Lilly: Walmart has 4,600 pharmacies nationwide and is the world's largest retailer.
Lilly is currently developing an oral version of a small-molecule GLP-1 receptor agonist to treat obesity -- its current treatments are injected -- which it expects to submit to global regulators for approval by the end of 2025. The company recently announced a $1.2 billion expansion of its manufacturing facility in Puerto Rico, which specializes in oral solid medicines.
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In addition to obesity and diabetes, Lilly manufactures major medications for migraines, cancer, COVID-19, skin conditions, autoimmune diseases, and Alzheimer's disease.
GLP-1 investing
There are several ways to invest in the burgeoning market for GLP-1 drugs, which in addition to obesity and diabetes have potential to treat addictions ranging from alcohol and narcotics to gambling. Mental health professionals say the drugs may mark a turning point in addiction psychiatry and public health.
Eli Lilly and rival drugmaker Novo Nordisk are the leading companies in the GLP-1 space, but others are emerging. Among them is Pfizer; in September that company announced it would acquire Metsera, a next-generation, clinical-stage biopharmaceutical company that's developing several obesity treatments.
Novo Nordisk and Pfizer are certainly formidable competitors. But it seems there will be plenty of market share to go around, as sales of GLP-1 drugs are only going to accelerate. J.P. Morgan research forecasts that the GLP-1 market will top $100 billion by 2030, driven equally by diabetes and obesity treatment. That projection does not include the potential of these drugs to also treat addictions and compulsive behaviors.
No matter which GLP-1 maker investors choose, it's critical to have an early stake in this burgeoning drug technology. As Eli Lilly currently has the most popular drug on the planet, it's a very good place to put $1,000 right now. At its recent price of around $850, you'd only get one share. But that's a great start, as it seems there's tremendous upside for any company able to manufacture and scale up production and marketing of this nearly miraculous new type of medicine.
