A sign with the company logo sits outside the Eli Lilly headquarters in Indianapolis, Indiana on March 17, 2024.
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Elie Lilly reached a market capitalization of $1 trillion on Friday, becoming the world’s first healthcare company to join the exclusive club dominated by technology companies.
Eli Lilly briefly hit the $1 trillion mark in morning trading before pulling back. The stock last traded around $1,048.
The company’s shares have soared more than 36% this year as investors applaud gains over its main rival. Novo Nordisk in the GLP-1 drug space. Shares of the Indianapolis, Indiana-based pharmaceutical maker have benefited from the growing popularity of its weight-loss injection Zepbound and diabetes treatment Mounjaro.
Eli Lilly shares have soared on the success of its drugs Mounjaro and Zepbound. Demand is only expected to grow as approvals for treatment uses and insurance coverage increase.
Both drugs have generated breathtaking sales growth for Eli Lilly. Last month, the pharmaceutical maker said Mounjaro generated third-quarter revenue of $6.52 billion, an increase of 109% from a year earlier. Meanwhile, Zepbound reported revenue of $3.59 billion during the period, up 184% from the year-ago period.
Demand for these treatments will only increase as approvals for their use and insurance coverage increase. Additionally, the drugmaker expects an oral version of its popular drugs to hit the market next year, which could provide patients with a more convenient option than an injection that is easier for the company to produce.
Eli Lilly will likely remain a dominant player in the weight-loss drug market, which some analysts estimate could be worth more than $150 billion by the early 2030s.
But despite its recent struggles and leadership shakeups, Novo Nordisk remains a formidable rival to Eli Lilly in the space. Pfizer also took a big step forward in the market by winning a $10 billion bidding war with Novo Nordisk for obesity drugmaker Metsera earlier this month.
The dazzling success of Zepbound, Mounjaro
Eli Lilly, a pharmaceutical chemist and veteran of the American Civil War, founded the company of the same name in 1876. It has long been at the forefront of diabetes treatment, introducing the world’s first commercial insulin in 1923.
Eli Lilly became a publicly traded company on the New York Stock Exchange in 1952 and for decades relied on a highly successful product line to generate much of its profits and revenue. They include its insulins, the antidepressant pill Prozac and the first polio vaccine.
An Eli Lilly & Co. Zepbound injector pen, March 28, 2024.
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Eli Lilly hit the jackpot with the May 2022 approval of tirzepatide for diabetes, sold under the name Mounjaro. It began to compete with Ozempic, Novo Nordisk’s diabetes injection, which had entered the market a few years earlier.
But Eli Lilly brought a new way to treat diabetes and, eventually, obesity. Tirzepatide works by mimicking two hormones produced in the gut called GLP-1 and GIP. GLP-1 helps reduce food intake and appetite. GIP, which also suppresses appetite, may also improve how the body breaks down sugar and fat.
Meanwhile, Novo Nordisk’s semaglutide, the active ingredient in Ozempic and its weight-loss drug Wegovy, only targets GLP-1.
Mounjaro achieved “blockbuster” status, meaning it generated more than $1 billion in annual sales, in its first full year on the market.
Eli Lilly then won approval for tirzepatide as a treatment for obesity, sold under the name Zepbound and which now competes with Novo Nordisk’s Wegovy.