At the close of trading on 21/11, shares of US pharmaceutical company Eli Lilly rose 1.6%, pushing its market capitalization to USD 1 trillion. This makes it the first pharmaceutical company to join this exclusive group, which has been dominated by tech giants.

Since the beginning of the year, Lilly's shares have surged by over 36%. Analysts attribute about 35% of this growth to the booming weight-loss drug market. Over the past two years, a steady stream of obesity treatment medications has entered the market, establishing this category as one of the most lucrative segments in the healthcare industry.

Logo outside Eli Lilly's headquarters in San Diego, California. Photo: Reuters

Sales of Lilly's tirzepatide-based drugs, marketed as Mounjaro for type two diabetes and Zepbound for obesity treatment, have surpassed Merck's Keytruda to become the world's top-selling medication.

Denmark's Novo Nordisk once led the market, but Mounjaro and Zepbound rapidly gained traction, enabling Lilly to surpass its rival. Lilly benefited partly from supply chain disruptions that hampered Novo's 2021 launch of Wegovy. Furthermore, Lilly's medications have shown superior clinical efficacy, and the company has expanded its production and distribution network more swiftly.

The company's stock performance underscores investor confidence in sustained demand for obesity treatment drugs. Since Zepbound's launch in late 2023, Lilly's shares have surged by over 75%, significantly outperforming the S&P 500 index's 50% increase during the same period.

Last quarter, Lilly reported over USD 10 billion in revenue from its diabetes and obesity drugs, accounting for over half of its total revenue. Evan Seigerman, an analyst at BMO Capital Markets, stated, "Current valuation reflects investor confidence in the long-term growth potential of metabolic disease treatments. It also indicates investors are prioritizing Lilly over Novo in the weight-loss drug race."

Last month, Lilly increased its annual revenue forecast by over USD 2 billion, citing robust global demand for its obesity and diabetes drugs. Wall Street estimates the weight-loss drug market will reach USD 150 billion by 2030, with Lilly and Novo expected to control the majority of global sales.

Investors are now focusing on Lilly's oral obesity treatment, orforglipron, which is anticipated to receive approval early next year.

Ha Thu (according to Reuters)