Eli Lilly has hit $1 trillion in market value, making it the first drugmaker to enter the exclusive club dominated by tech giants and underscoring its rise as a weight-loss powerhouse.
A more than 35 percent rally in the company’s stock this year has largely been driven by the explosive growth of the weight-loss drug market and saw it join the $1 trillion club on Friday.
Once seen as a niche category, obesity treatments are now one of the most lucrative segments in healthcare, with steadily rising demand.
Novo Nordisk had the early lead in the space, but Lilly’s drugs – Mounjaro and Zepbound – have surged in popularity and helped eclipse its rival in prescriptions.
The company’s shares were up 1.3 percent at a record high of $1,057.70.
Lilly now trades at one of the richest valuations in big pharma, at about 50 times its expected earnings over the next 12 months, according to LSEG data, reflecting investors’ belief that demand for obesity drugs will remain strong.
Shares have also far outpaced the broader United States equity market. Since the launch of Zepbound in late 2023, Lilly has gained more than 75 percent, compared with a more than 50 percent rise in the S&P 500 over the same period.
In the latest reported quarter, Lilly posted combined revenue of more than $10.09bn from its obesity and diabetes portfolio, accounting for more than half of its total revenue of $17.6bn.
“They are doing so many things outside of obesity, but to suggest anything is driving share price beyond obesity at this point, I don’t know if that would be a factual statement,” said Kevin Gade, chief operating officer at Lilly shareholder Bahl and Gaynor, in advance of the milestone.
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