Eli Lilly's stock reached a new record high on Thursday, surpassing a $1.2 trillion market valuation after the company reported stronger-than-expected earnings. The surge was primarily fueled by significant sales of its weight-loss drugs, Mounjaro and Zepbound.
The company's shares climbed 6% following the announcement, which also included an upward revision of its full-year earnings forecast. Sales for both Mounjaro and Zepbound exceeded expectations by more than 5%, underscoring Eli Lilly's dominant position in the rapidly expanding obesity drug market.
Eli Lilly reported that over half a million patients are currently using these injections through Medicare. Despite a reduced monthly cost of $50 for these patients, the company raised its annual forecasted revenue by 1% to $92 billion. This performance highlights the substantial lead Eli Lilly holds in the multi-billion dollar GLP-1 market. In comparison, competitor Novo Nordisk, maker of Wegovy, has a market valuation of approximately $171 billion.
Recent acquisitions by Eli Lilly, including psychedelic drugmaker AtaiBeckley and vaccine company Cuervo, had impacted profit outlooks, leading to a reduction in forecasted profit shares by 50 cents. However, the overall increase in the annual forecast was sufficient to reassure investors, according to Greg Halter, director of research at Carnegie Investment Counsel.
"They’re spending money so that they can make money down the road," Halter stated, noting his ownership of over 16,000 Eli Lilly shares.
Investors are also closely monitoring Eli Lilly's new oral weight-loss drug, Foundayo, to assess its competitive potential against Novo Nordisk's oral Wegovy, which currently leads in prescriptions. While oral Wegovy demonstrated an average body weight reduction of about 14% over 64 weeks in studies, Foundayo patients saw an approximate 11% reduction over 72 weeks. Eli Lilly's pill experienced 15% lower sales than anticipated last quarter but has launched in the UK and is slated for release in other European countries by the end of the year.
