🧬 Eli Lilly ($LLY): The GLP-1 Powerhouse Approaching $1 Trillion

When pharma analysts spoke about

$LLY

crossing into rarefied air earlier this year, few predicted how quickly it would happen... I first spoke about

$LLY

at $750 6 months ago.... Today, trading around $990, even at one point going over $1000 - with a market cap of $885-930 billion, Lilly is knocking on the door of becoming the first healthcare company to join the trillion-dollar club.

This isn't speculation. It's the result of execution, innovation, and a once-in-a-generation product portfolio.

The GLP-1 Revolution Driving Growth

Lilly dominates the obesity and diabetes market with two blockbuster drugs that are rewriting treatment paradigms:

Mounjaro (Type 2 Diabetes) + Zepbound (Obesity) = $10.1B in Q3 2025 revenues (+131% YoY)

• Mounjaro: $6.52B (+109% YoY)

• Zepbound: $3.59B (+184% YoY)

For context: This tirzepatide franchise just surpassed Merck's Keytruda ($8.1B in Q3) to become the world's best-selling drug.

What's Next:

• Orforglipron (oral GLP-1) completing Phase 3 trials with submissions expected by year-end 2025

• CEO Dave Ricks expects FDA approval by March 2026

• International launches accelerating in China, Brazil, India, and Mexico

The GLP-1 market is projected to exceed $100B+ by the early 2030s, and Lilly is positioned as the category leader.

Beyond GLP-1... The Diversification Strategy

Smart investors know: single-drug dependence is risky. Lilly is building a multi-engine growth machine:

Alzheimer's Treatment

• Kisunla (Donanemab) - FDA-approved for early Alzheimer's, first proven to slow cognitive decline

• Represents a breakthrough in neurodegenerative disease treatment

Oncology & Immunology

• Verzenio (breast cancer): $1.47B in Q3 2025 (+7% YoY)

• Jaypirca and Omvoh expanding in oncology and autoimmune markets

• Radiopharmaceutical investments through Point Biopharma ($1.4B acquisition) and Aktis Oncology partnership

Pipeline Depth

• 40+ programs in Phase 2/3 across neuroscience, immunology, and cardiology

• Recent acquisitions: Scorpion Therapeutics, SiteOne Therapeutics, Adverum Biotechnologies

Lilly isn't a one-trick pony... it's an innovation engine.

Financial Dominance & Operating Leverage

Q3 2025 Financial Highlights

Revenue: $17.6B (+54% YoY)

Non-GAAP EPS: $7.02 (+495% YoY)

Gross Margin: 83.6% (+1.4 pts)

Operating Cash: Strong (Record levels)

Full-Year 2025 Guidance (Raised)

• Revenue: $63.0-63.5B (up from $60-62B)

• Non-GAAP EPS: $23.00-23.70 (up from $21.75-23.00)

Profitability Metrics

• Return on Equity (ROE): ~74-88% (exceptional capital efficiency)

• Gross Margin: 83.6% (among highest in pharma)

• R&D Investment: $3.47B in Q3 (+27% YoY) fueling future growth

These metrics place Lilly among the most efficient, profitable companies in the S&P 500... comparable to tech giants like NVIDIA and Apple in terms of returns.

Competitive Position

Eli Lilly

• Market Cap: ~$885-930B

• 2025 Rev Growth: +40-50%

• Forward P/E: ~31×

• Positioning: Market leader, oral GLP-1 coming

Novo Nordisk

• Market Cap: ~$204-215B

• 2025 Rev Growth: +30%

• Forward P/E: ~12×

• Positioning: Struggling with competition, stock down 60% from peak

Pfizer

• Market Cap: ~$160B

• 2025 Rev Growth: Declining

• Forward P/E: ~12×

• Positioning: Lost Metsera bid to competition

Key Advantages:

• Tirzepatide (Mounjaro/Zepbound) consistently outperforms Novo's semaglutide (Ozempic/Wegovy) in head-to-head trials

• First-mover advantage with oral GLP-1 (orforglipron)

• Manufacturing scale-up: $12.5B+ invested in new facilities (Virginia, Texas, Puerto Rico)

• Direct-to-consumer platform (LillyDirect) creating pricing flexibility

Valuation & Price Targets

Current Price: ~$990

Market Cap: ~$885-930B

Valuation Framework

• 2025 Est. EPS: ~$23.50

• Forward P/E: ~42× (premium justified by growth)

• PEG Ratio: ~0.9 (attractive given growth rate)

Long-Term Track Record

Performance:

• 52-Week Range: $623.78 - $999.92

• 1-Year Return: +20-25% (volatile but trending up)

• Market Leadership: Approaching $1 trillion valuation

Dividend Profile:

• Current Yield: ~0.6% (modest but growing)

• Annual Dividend: $6.00 per share

• Growth Rate: Consistently increasing ~15% CAGR

The dividend is small now, but management prioritizes reinvestment in R&D while rewarding long-term shareholders with steady increases.

Risks to Monitor (Critical for Balance)

Every investment has risks. Here's what could derail the thesis:

Regulatory & Pricing Pressure

• Government price controls on GLP-1 drugs (Trump administration deal includes price cuts)

• Medicare/Medicaid coverage expansion requires discounting

• International pricing pressures as volumes increase

Competition Intensifying

• Novo Nordisk fighting back with oral GLP-1 programs

• Amgen, Pfizer, and others entering the space

• Compounding pharmacies eating market share during supply shortages

Operational Challenges

• Manufacturing constraints still limiting supply in some markets

• CVS formulary changes disrupted Zepbound access temporarily

• Volume growth partially offset by 10% lower realized prices in Q3

Valuation Risk

• At ~$930B market cap, expectations are sky-high

• Any guidance miss or pipeline disappointment will be punished severely

• Forward P/E of ~42× leaves little room for error

Pipeline Execution

• Orforglipron approval timing uncertain

• Alzheimer's market adoption slower than hoped

• Clinical trial failures in crowded pipeline

Smart investors acknowledge risks while staying focused on the long-term thesis.

What Management Is Saying

David Ricks, CEO (Q3 2025 Earnings Call):

"We're not just treating metabolic disease... we're fundamentally changing how the world thinks about obesity and diabetes. The demand we're seeing globally confirms this is a paradigm shift, not a trend."

On Manufacturing:

"We're investing over $12 billion in capacity expansion to meet demand. This isn't about short-term wins; it's about serving tens or hundreds of millions more people globally."

This leadership clarity is why long-term investors stay convicted even during volatility.

Investment Thesis

Category-defining science... GLP-1 revolution is real and accelerating

Hyper-growth with sustainability, 40-50% revenue growth maintained

Record profitability 83.6% gross margins, 74-88% ROE

Pipeline depth 40+ programs beyond GLP-1

Flawless execution. Management delivering on promises quarter after quarter

Manufacturing scale - $12B+ invested to capture long-term demand

This is what a generational compounder looks like.

Built on science, execution, and vision... not hype or momentum.

Bottom Line — The Path to $1 Trillion

Current State (Nov 2025):

• Stock Price: ~$990

• Market Cap: ~$885-930B

• Distance to $1T: ~7-13% away

Catalysts Ahead:

• Orforglipron approval (March 2026 expected)

• Continued GLP-1 market expansion

• Kisunla (Alzheimer's) adoption ramp

• Pipeline readouts in oncology and immunology

For Long-Term Investors:

Volatility is part of the journey. The stock fell to $624 in August 2025, then surged 58% to approach $1,000 by November. This isn't a smooth ride but the fundamentals support the upward trajectory.

Patience pays. Conviction compounds.