Over the past five years, Eli Lilly (LLY -0.88%) stock managed a total return of 376%. If the stock managed a repeat over the next five years, share prices would top $5,500. Much of its current performance boost is thanks to enthusiasm over its GLP-1 offerings.
Are the same factors that led to the healthcare company's sharp rise likely to recur? The simple answer is no. While its metabolic GLP-1 weight-loss therapies helped spike revenue, it's not likely to happen again. Still, there are reasons to believe the pharmaceutical stock could double in value over the next five years, making a $5,000 investment in Eli Lilly stock worth more than $10,000 in five years. Here's why.
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The GLP-1 run isn't over
Eli Lilly, through tirzepatide, marketed as Mounjaro for type 2 diabetes and Zepbound for chronic weight management, is still a leader in the GLP-1 space. Tirzepatide is showing to be an incredibly versatile incretin-based peptide drug.
NYSE: LLY
Key Data Points
Excess weight is tied to many health problems, and tirzepatide could expand to adjacent indications. It has already been approved to treat obstructive sleep apnea, and on Aug. 28, the Food and Drug Administration (FDA) approved Mounjaro to lower the risk of major adverse cardiovascular (CV) events, including cardiovascular death, non-fatal heart attack, or non-fatal stroke in adults with type 2 diabetes who are at high risk.
Other indications that could soon follow include heart failure with preserved ejection fraction (HFpEF) and metabolic dysfunction-associated steatotic liver disease (MASH/NASH).
The pipeline goes beyond metabolic health
In Q2, Mounjaro and Zepbound helped Lilly earn $23 billion in revenue, up 48% year over year. That growth enables the company to invest in a diversified pipeline across oncology, neuroscience, and immunology. Lilly spent $3.8 billion on R&D in the quarter.
It has several promising recent approvals, including Ebglyss for treatment of atopic dermatitis, Kisunla for treatment of early-stage Alzheimer's disease, and Omvoh for the treatment of ulcerative colitis. Those drugs, plus several late-stage cancer therapies, should provide high-margin revenue streams going forward.
