Eli Lilly (LLY 2.20%) is the most valuable healthcare company in the world, with a market cap of around $950 billion. In the past five years, the stock price has soared an incredible 400%, thanks in large part to the surging popularity of its GLP-1 drugs, Mounjaro (approved for diabetes) and Zepbound (approved for weight loss).
If you're worried you missed the boat on Eli Lilly, you shouldn't be, as there are other healthcare companies involved in the development of GLP-1 drugs, which could generate some strong growth in the future. One stock you'll want to keep an eye on is Amgen (AMGN 1.82%).
Image source: Getty Images.
Why Amgen could be an underrated stock in the GLP-1 race
Amgen is developing a promising GLP-1 drug, MariTide, which is an injectable treatment that can be taken just once a month. Mounjaro and Zepbound are both weekly injectables. And while there is excitement around pills, those typically need to be taken on a daily basis. MariTide may offer a more convenient option for people. Amgen CEO Bob Bradway says the data suggests it may even need to be less frequently -- perhaps on a quarterly basis.
While many people may prefer pills over injectables, if using MariTide means just using the treatment four times a year, that might be a preferred option for a big slice of the market. In clinical trials, MariTide has shown that it can help people lose up to 20% of their body weight over a 52-week period, which is comparable to the currently approved GLP-1 treatments.
NASDAQ: AMGN
Key Data Points
Amgen is a fairly valued stock that could have plenty of room to run
If MariTide, which is currently in phase 3 trials, ends up obtaining approval, there could be a ton of upside for Amgen's stock. In the past five years, it has risen by a relatively modest rate of 34%. And it trades at a forward price-to-earnings (P/E) multiple of 16, based on analyst expectations. By comparison, investors today are paying a forward P/E of 32 for Eli Lilly stock.
Amgen is a cheap buy in comparison to Eli Lilly, and with a possible catalyst that could drive its share price much higher, it could make for an appealing healthcare stock to buy right now. The GLP-1 drug market could be worth more than $150 billion within a decade; there's plenty of room for Eli Lilly and other companies to carve out some significant market share.
