Eli Lilly $1 trln value is bet on Coke-like future

By Aimee Donnellan

Eli Lilly LLY is looking more like a tech giant than a drugmaker. Last month, the creator of Mounjaro and Zepbound’s market value soared past $1 trillion. The U.S. group’s obesity treatments and pipeline of drugs only partly explain the hefty share price. Investors also appear to be betting that the widespread adoption of weight-loss medications will see Eli Lilly's drugs become household brands with lasting consumer appeal and pricing power, like Coca-Cola KO.

Eli Lilly’s success is relatively recent. It entered the weight loss drug market in 2022, four years after Novo Nordisk NOVO_B launched Ozempic, but quickly caught up thanks in part to chronic shortages as demand vastly outstripped supply. In the last week of October, prescriptions for Eli Lilly’s obesity medication Zepbound were nearly 60% higher than those for the Danish group's equivalent drug Wegovy, and the company's sales are expected to grow by 41% this year, as per LSEG data. Last month, its market value peaked at $1.05 trillion and is now hovering around $980 billion.

The soaring valuation also reflects investors faith in the next generation of drugs beyond Zepbound. CEO David Ricks is hoping Retatrutide, an obesity medication which has delivered 24% weight loss in early trials, and orforglipron, a pill, which would be cheaper to make and appeal to a wider pool of patients than first-generation injectable treatments. Thus, even with the price of weight loss drugs falling, a much bigger uptake could supercharge Eli Lilly's sales, and leave it as a household name with lasting brand power.

That helps explain the thirteen digit valuation. Eli Lilly is currently worth a stratospheric 33 times its forward earnings, which reflects its rapid ascent. But annual revenue growth will slow to just 3% between 2030 and 2033, as the uptake of weight-loss drugs peaks, according to Visible Alpha forecasts. And yet Eli Lilly is currently worth some 18 times its expected earnings in that year, far above even premium pharmaceutical rivals AstraZeneca AZN and Roche RO, which are valued on around 12 times. The multiple is closer to highly-rated consumer brands like Coca Cola or energy drink-maker Monster Beverage Corp MNST, which are valued on 17 and 20 times their 2030 earnings respectively.

Still, Coca-Cola has spent decades and billions of dollars perfecting its brand with generations of consumers. Weight-loss drugs are unlikely to enjoy the same lasting appeal: the relative decline of Novo Nordisk's Ozempic shows that prescription drug users care little about branding and are much more interested in the effectiveness of the remedies or cost. And the evolution of weight loss therapies may make it hard for any one firm to dominate. New entrants like Roche and Pfizer PFE, and the expiry of the patent on semaglutide, the active ingredient in Ozempic and Wegovy in 2031, will apply downward pressure to all sales. That is likely to lead to a highly competitive market, in which drugmakers undercut each other, making sales less predictable. For now Eli Lilly has entered a select club of trillion-dollar companies, but it will find it hard to keep its place there.

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CONTEXT NEWS

Eli Lilly hit $1 trillion in market value on November 21.

A more than 35% rally in the company's stock in 2025 has largely been driven by the explosive growth of the weight-loss drug market.