Eli Lilly (NYSE: LLY) It may seem like an expensive stock to invest in now. It trades at nearly 90 times trailing earnings. Its $720 billion market capitalization also means it is the most valuable healthcare stock in the world.
Although it may appear to have peaked given the stock’s slowdown in recent weeks, there could be a huge catalyst coming for the business next year. It’s something investors should keep a close eye on because it could send the stock to record highs in 2025.
Eli Lilly is a big name in diabetes care and weight loss. Tirzepatide generates billions in revenue for Health care company. It is a GLP-1 injection approved for the treatment of diabetes under the Mounjaro brand and for weight loss under the Zepbound brand. But what investors are really eager to know is whether the company might have GLP-1 weight loss pills in its portfolio in the near future.
By April 2025, Eli Lilly expects to have data to report on a late-stage trial of orforglipron, an oral GLP-1 drug that has shown promise to date. In results from a phase 2 trial, a once-daily pill helped obese and overweight adults lose up to 14.7% of their body weight over a 36-week period. Now, the phase 3 trial data is coming in, and if it proves to be quite promising and without any serious side effects, it may be a matter of time before the FDA gives it approval.
With investors often buying shares before official approval comes in, it wouldn’t be surprising to see Eli Lilly shares rise if the trial results look strong.
Eli Lilly already has a strong list of products in its portfolio, led by Mounjaro and Zepbound. They have enabled the company to significantly increase its sales in recent quarters. Encouragingly, these products are still in their early stages of development.
There could also be more indications for these drugs, which could allow them to reach more patients. Zibbond, for example, may soon be approved as a treatment for sleep apnea, given the effectiveness it has shown in clinical trials.
As more studies on these drugs are completed, they can gain approval for more indications, boosting their revenue potential in the process. Together, Zepbound and Mounjaro generated nearly $4.4 billion in sales during the most recent quarter, which ended September 30, representing 38% of the company’s total revenue.
Having another weight-loss drug in Eli Lilly’s portfolio could quickly alleviate any concerns about the company’s valuation. It is an early leader in the highly lucrative obesity drug market, which some analysts expect will be worth $200 billion by 2031.
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