Eli Lilly becomes the first healthcare company to reach a market value of $1 trillion

A sign with the company logo stands in front of Eli Lilly’s headquarters in Indianapolis, Indiana, on March 17, 2024.

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Eli Lilly reached a market capitalization of $1 trillion on Friday, becoming the first healthcare company in the world to join the exclusive club dominated by technology companies.

Eli Lilly briefly hit the $1 trillion mark in morning trading before retreating again. The stock was last trading at around $1,048. Eli Lilly is the second non-tech company after Warren Buffett to reach the coveted $1 trillion mark in the US Berkshire Hathaway.

The drugmaker’s stock has risen more than 36% this year as investors welcome gains over its main rival Novo Nordisk in the field of GLP-1 drugs. The Indianapolis-based company’s stock is benefiting from the soaring popularity of its weight-loss shot Zepbound and diabetes drug Mounjaro.

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Eli Lilly’s stock has soared on the success of its drugs Mounjaro and Zepbound. Demand is only expected to increase as approvals for treatment uses and insurance coverage increase.

The two drugs have brought Eli Lilly stunning sales growth. Last month, the company announced that Mounjaro had third-quarter revenue of $6.52 billion, up 109% year-over-year. Meanwhile, Zepbound posted revenue of $3.59 billion in the period, up 184% from the same period last year.

Demand for the treatments will only increase as approvals for their use and insurance coverage increase. Additionally, Eli Lilly expects to launch an oral version of its popular drugs next year, which could offer patients a more convenient option than a shot, which is easier for the company to produce.

Eli Lilly is likely to remain a dominant player in the weight-loss drug market, which some analysts believe could be worth more than $150 billion by the early 2030s.

But despite recent difficulties and leadership changes, Novo Nordisk remains a formidable rival to Eli Lilly in this space. Pfizer The company also propelled the market forward when it won a $10 billion bidding war with Novo Nordisk for obesity drug maker Metsera earlier this month.

The resounding success of Zepbound, Mounjaro

Eli Lilly, a pharmaceutical chemist and Union veteran of the U.S. Civil War, founded his eponymous company in 1876. It has long been a leader in 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 number of highly successful products to generate much of its profits and revenue. These included insulin, the antidepressant Prozac and the first polio vaccine.

A Zepbound injection pen from Eli Lilly & Co., March 28, 2024.

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Eli Lilly hit the jackpot with the May 2022 approval of tirzepatide for diabetes, sold as Mounjaro. It began to compete with Novo Nordisk’s diabetes injection Ozempic, which had hit 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 the way 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 in its first full year on the market, meaning it generated more than $1 billion in annual sales. Eli Lilly then received approval in late 2023 for tirzepatide for the treatment of obesity, which is sold as Zepbound and now competes with Novo Nordisk’s Wegovy.

By 2024, Mounjaro had revenue of $11.54 billion, while Zepbound posted revenue of $4.93 billion.

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