Eli Lilly--the first "1 trillion dollar" pharmaceutical company!

Driven by strong demand for weight-loss and diabetes drugs, Eli Lilly has become the world's first pharmaceutical company to join the trillion-dollar club.

On Friday, Eli Lilly’s US stock price closed up 1.60%, having already risen nearly 40% this year. The company’s market value broke through $1 trillion, joining the ranks of trillion-dollar companies such as the seven tech giants and Warren Buffett’s Berkshire Hathaway.

(Eli Lilly closed up 1.60% on Friday)

As reported by Wallstreetcn, Eli Lilly is rapidly widening the gap with competitors due to its overwhelming advantage in GLP-1 drugs.

Although Eli Lilly’s weight-loss drug Zepbound only launched at the end of 2023, increased production capacity and new clinical data have enabled it to surpass Novo Nordisk’s Wegovy, taking the vast majority of new obesity drug prescriptions.

Investor enthusiasm for the pharmaceutical sector continues to rise. On Friday, US healthcare ETFs surged more than 2% and are up 12% year-to-date, as concerns over Trump’s tariff threats and drug price cuts begin to fade.

(US healthcare ETF up 12% year-to-date)

Strong Growth in Weight-Loss Drug Sales

Eli Lilly’s weight-loss drug sales in the third quarter more than doubled year-on-year, thanks to the company’s expansion into new markets.

Mounjaro for diabetes and Zepbound for weight-loss together generated $10.1 billion in revenue for the quarter. Morningstar's Head of Healthcare Research, Karen Andersen, said:

It’s difficult to identify any weaknesses in Eli Lilly’s strategy right now. Everything is working in Lilly’s favor.

She noted that disappointing trial results for the new weight-loss drug orforglipron in August last year led to a stock decline, "that’s the only negative news about Lilly I can think of."

Neuberger Berman portfolio manager Rick Bradt said, Eli Lilly’s share rally in recent weeks is partly due to investors rotating out of big tech chasing AI growth and into other sectors. He said:

There has been a massive sector rotation in US stocks. That's why you see broad outperformance in healthcare. Lilly stands out among pharmaceutical companies on every level.

Eli Lilly on the Eve of “The Strongest New Product Cycle in Biopharma History”

As previously reported by Wallstreetcn, Goldman Sachs believes Eli Lilly’s oral weight-loss drug candidate orforglipron represents “one of the most important new product cycles across the entire biopharma coverage.”

Lilly’s management disclosed that global regulatory submissions are about to begin, and the drug is expected to launch for obesity treatment in the US next year.

Of particular note, the drug matches at least four out of three requirements in the FDA’s priority voucher program, paving the way for accelerated approval.

Regarding pricing strategy, Eli Lilly sees orforglipron taking a similar sales model as Zepbound, focusing on leveraging the LillyDirect direct-to-consumer platform. Management emphasized that the convenience of oral administration will greatly expand the global target market.

Beyond the GLP-1 product line, Lilly is also performing well with next-generation obesity compounds.

According to Wallstreetcn, phase II data for the selective amylin agonist eloralintide show weight loss of 20.1%, and late-stage clinical trials will commence.

Kenneth Custer, president of Lilly’s cardio-metabolic health division, said the data show eloralintide has strong efficacy and better tolerance, offering an alternative to incretin-based therapies.

In addition, results from six phase III trials of the triple agonist retatrutide are expected by the end of 2026.

Worth noting is that Lilly recently disclosed its Lp(a) program, muvalaplin, has entered phase III clinical trials. This emerging cardiovascular therapeutic is now drawing investor attention. Phase II data show that, at the highest dose, this drug lowered biomarker levels by more than 85% compared to placebo.

Largest Shareholder Reducing Holdings and Valuation Concerns

As Lilly's stock price soars, its largest shareholder, the Lilly Foundation, has been selling shares.

According to stock sales tracked by VerityData/TMX Datalinx, the foundation sold a record $2.4 billion worth of stock in Q4 2025, up from the prior record of $1.3 billion in Q2 2024.

Eli Lilly commented on its trillion-dollar market cap:

Lilly remains committed to our focus on scientific breakthroughs and strategic investment, to enrich our product pipeline and meet patient needs.

Furthermore, with Lilly’s market valuation surpassing $1 trillion, debate over its valuation is intensifying. Currently, the company’s 2026 forward P/E is 41x, far higher than the industry average of roughly 16x.

However, FactSet projects the annual sales of two of Lilly’s star drugs will exceed $40 billion by 2026 and approach $60 billion by 2030, which may support the high valuation.

The biggest long-term risk comes from the patent system.

Unlike tech companies which can endlessly iterate products, any blockbuster drug faces the “law of physics” of patent expiration. Citi’s Davis said bluntly:

This will be the largest patent cliff in history.

At that time, competition from companies like Amgen and Pfizer will also intensify.

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