It's no secret that Eli Lilly's (LLY 2.22%) strong performance in recent years is due in large part to its clinical and commercial progress with tirzepatide, a medicine approved for diabetes and weight loss. This therapy's sales are growing rapidly, helping the pharmaceutical leader post excellent financial results. Further, Eli Lilly's weight loss portfolio, even beyond this single product, should remain its biggest growth driver in the foreseeable future.
However, there is more to the company than its work in this therapeutic area. Let's consider one thing the company recently said and why investors should see it as a bullish signal.
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Strong clinical execution
One problem pharmaceutical companies routinely run into when developing medicines is clinical trial failures. According to some data, the success rate for phase 2 studies is only about 50%, and it rises to 59% in phase 3. Estimates do vary, and these rates are also not uniform across different therapeutic areas (Alzheimer's disease, for instance, is a particularly tough nut to crack).
But the basic point is that a surprisingly high percentage of medicines, even those that make it to late-stage studies, don't end up on the market. Eli Lilly, though, is trying to rewrite the records and defy expectations. According to the company's chief scientific and medical officer, Daniel Skovronsky: "We [Eli Lilly] achieved positive outcomes for nearly all R&D key events in 2025, a rare set of results in this industry."
True, the majority of those results were in weight management or diabetes. Eli Lilly's retatrutide, a next-gen anti-obesity medicine, performed well in a phase 3 study, as did orforglipron, an oral GLP-1 racing toward approval.
NYSE: LLY
Key Data Points
However, Eli Lilly also made solid clinical progress in other areas. For instance, the company's cancer medicine, Jaypirca, aced a phase 3 study and is well on its way to earning label expansions. In 2025, Eli Lilly also reported that its Alzheimer's disease medicine, Kisunla, is helping slow cognitive decline in a long-term study.
Eli Lilly's innovative machine is performing well, arguably better than that of most of its peers in the industry. And that's a point worth highlighting.
Why the stock is a buy
Eli Lilly is looking to further boost its clinical trial success rate. That's why the drugmaker is investing in artificial intelligence (AI), notably by building what will become the industry's largest AI supercomputer, among other initiatives. Eli Lilly hopes to leverage AI to accelerate drug development. Even regulators have recognized the value of AI in drug discovery. That's why the U.S. Food and Drug Administration announced last year that it was phasing out animal models in favor of other methods, including AI-based models.
All this shows that, once again, Eli Lilly is at the forefront of innovation in its industry. On top of that, the company is recording strong financial results, boasts a deep pipeline, and continues to reward shareholders with growing dividends and share buybacks. Eli Lilly may be primarily a diabetes and weight loss company, but there are many other reasons the stock is worth investing in.
