At the end of last week, US pharmaceutical company Eli Lilly surpassed a stock market value of one trillion, making it the first company in the sector to achieve such a result, more than double that of Johnson & Johnson, the second pharmaceutical company by share value. These unprecedented results are mainly related to sales of new generation drugs that are excellent for treating obesity. Eli Lilly is not very well known in Italy, but in the coming months we will hear about it a lot and we will see its logo almost everywhere.
The company is actually one of the main sponsors of the Milan Cortina Winter Olympics, which will be held in the middle fortnight of February next year. Its logo, recognizable by the italicized “Lilly”, will appear on banners around the competition grounds at the Olympic venue, while those living in Milan have already begun to see it on various advertising posters promoting the Olympics and the company’s activities, but without reference to specific drugs (in Italy drugs that can only be obtained by medical prescription cannot be advertised). The sponsorship and greater visibility are tied to Eli Lilly’s plans to introduce itself to the public, given the spread of its drugs related to obesity treatment and advanced therapies.
The company has been selling Moujaro, a drug to control diabetes, for about three years, and for about a year and a half a version with a different dosage called Zepbound and indicated to fight obesity. The active ingredient belongs to the class of GLP-1 receptor agonists, such as Ozempic/Wegovy from the Danish pharmaceutical company Novo Nordisk, which in just a few years has revolutionized the way obesity is treated. The companies that produce them have earned huge revenues with a sharp increase in their value on the stock market, although with varying enthusiasm from investors.
Comparison of market value between Eli Lilly (orange) and Novo Nordisk (blue) in the last five years (Stock Analysis)
Pharmaceutical companies often experience ups and downs: new drugs guarantee significant revenues, but those revenues diminish significantly when the protection provided by patents expires and competition arrives. Therefore, those who invest in this sector pay attention not only to what is going on currently, but also to the research programs that companies are carrying out for their next drugs. After making huge gains on the stock market thanks to Ozempic, Novo Nordisk recently lost value due to analysts’ skepticism about its ability to develop new products when drugs to treat obesity are no longer a novelty.
Investors’ optimism about Eli Lilly is instead tied to the company’s history, a certain alignment between its CEO and US President Donald Trump, and the company’s future plans for new product production.
Eli Lilly was named after its founder, who opened a small pharmacy in Indianapolis, Indiana, in 1876. Lilly was a veteran of the American Civil War, he was 37 years old and in a short time his business began to do well, mainly thanks to his resourcefulness. A century and a half later, today the company has about 50 thousand employees, this year alone has invested almost 14 billion dollars in research and is trying to improve its reputation, especially in the United States.
Along with other pharmaceutical companies, Eli Lilly has for years been accused of raising the price of insulin, the basic drug for controlling various forms of diabetes. In twenty years, the price of insulin sold by the company has increased more than tenfold, causing several states and organizations to sue it in the United States and sue other pharmaceutical companies that sell insulin. In 2023, after lengthy mediation conducted by President Joe Biden, the price of insulin was finally reduced, thereby setting a maximum out-of-pocket limit for patients even if they do not have health insurance.
Price revisions have brought improvements to the situation, but the fact of having to pay for medication that must be taken for life still affects the financial resources of many patients. In Italy, insulin is fully covered by the National Health Service, which always negotiates prices with manufacturers such as Eli Lilly that are much more profitable and cannot be compared with prices in the United States. Eli Lilly in Italy still has a limited market, and does not appear in the top ten places where there are several well-known manufacturers such as Novartis, Sanofi and Roche.
Trump called Dave Ricks, CEO of Eli Lilly, “one of the most influential people in the business world” and Ricks pointed to his dealings with the president to push sales of Zepbound. An agreement with the United States government has actually simplified the purchase of a new generation of drugs to treat obesity by self-pay patients, with significant price reductions and various types of discounts. Eli Lilly offers the possibility in the United States to purchase Zepbound directly from its website, with a periodic purchase plan to retain its customers (currently it is not known whether this drug must be taken for life and much depends on the patient).
The agreement increased sales and at the same time gave Eli Lilly greater attention to its future plans, which, unlike Novo Nordisk’s plans, appeared clearer. Barring unforeseen circumstances, in the spring of 2026 orforglipron will be authorized in the United States, its new active ingredient to treat obesity which, unlike current drugs, can be administered by pill, thus simplifying its administration compared to injections. This new drug may be cheaper and easier to take. In clinical trials and trials it has provided promising results, although lower than existing drugs. Eli Lilly is also working on other molecules to achieve a more pronounced slimming effect than Zepbound and other competitors such as Ozempic.
