Wall Street tends to latch onto exciting stories. Sometimes, however, investors are so nearsighted that they forget to consider the long-term picture. That's what could be taking place with Eli Lilly (LLY 1.65%) today. It's a good thing that the company is taking a practical view of the future. Here's what they're doing.
The big story for Eli Lilly
Eli Lilly is the leading maker of GLP-1 drugs right now. That's the story around the stock, which has resulted in a massive 225% price gain over the last three years. That price gain, however, has pushed the price-to-earnings ratio up to a massive 49 and the yield down to a minuscule 0.6%.
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To be fair, the company is doing very well in the GLP-1 space. Sales of Mounjaro rose 99% in 2025, with Zepbound sales rising an even more impressive 175%. Those probably aren't sustainable growth numbers, but it is easy to see why investors are excited about Eli Lilly's GLP-1 business.
The problem that management knows is there
But there is a downside to Eli Lilly's success. Mounjaro and Zepbound accounted for a huge 56% of the company's sales in 2025. The pharmaceutical giant's future is highly reliant on the continued success of these two drugs.
New drugs have only a limited period of time in which they enjoy patent protection. After the patent protection ends, less costly generic alternatives can enter the market, and the sales of blockbuster drugs usually decline precipitously. That's called a patent cliff, and it is just a normal part of the drug business. Simply put, the revenue from Mounjaro and Zepbound will eventually fade.
NYSE: LLY
Key Data Points
Eli Lilly is working on the next big thing
Well aware of the long-term problem posed by its GLP-1 success, Eli Lilly is using its GLP-1 revenue to invest in what it hopes will be the next big opportunity. That's why it is partnering with Seamless Therapeutics, a privately held German company that uses novel gene editing technology to treat hearing loss. The gene editing technology, if successful, could help to open up other investment opportunities.
However, this is just one of Eli Lilly's recent moves. It agreed to acquire Ventyx Biosciences (VTYX +0.00%) last month, a transaction that comes on top of a series of acquisitions made in 2025. Ventyx is developing oral treatments for inflammation, which is increasingly recognized as a key disease factor.
What you really need to know about the Ventyx acquisition and the Seamless partnership is that they are part of the company's larger push. Indeed, Eli Lilly is already working to address the patent cliff looming in the GLP-1 space. And since there's no way to know which new investment will pay off with a blockbuster product, it is investing in multiple opportunities.
