by Eli Lilly (NYSE: LLY) The company’s broad drug portfolio has helped boost profits over the years – and lately two products in particular have boosted growth. The major pharmaceutical company is selling Mounjaro and Zepbound, both prescribed for weight loss, and demand is outstripping supply.
Pharmaceutical companies are generally seen as safe investments because people need their medicines no matter what the economy does. This often results in a certain degree of profit stability. Lilly offers investors this investment profile, and thanks to its weight-loss drugs, it also brings the revenue growth you’d expect from a more traditional growth stock. How has that translated into stock performance? Let’s find out.
Blockbuster drug Mounjaro
If you had invested $10,000 in Eli Lilly stock five years ago, you would have $65,900 today. That’s a profit worthy of a top growth player. Lilly managed to attract the attention of a wide range of investors – from cautious to aggressive – as Mounjaro became a blockbuster drug. Now the recently launched Zepbound is following in those footsteps.
In its most recent quarter, Mounjaro generated over $1.8 billion in revenue, while Zepbound brought in approximately $517 million during its first full quarter of commercialization. The good news for shareholders and potential shareholders is that these gains are likely to continue. As mentioned, the demand for these products is high, with Lilly as a competitor Novo Nordisk can’t keep up so far. (Both are ramping up production, though, which should help boost profits further.)
According to Goldman Sachs Research, the weight-loss drug market could reach $100 billion by the end of the decade. Meanwhile, Lilly has other weight-loss candidates that are in late-stage development, and if all goes well there, the company’s status as a weight-loss drug giant could last for quite some time.
All this means that Eli Lilly stock can continue to reward investors in the long term.
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Adria Cimino has no positions in the stocks mentioned. The Motley Fool holds and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
If you invested $10,000 in Eli Lilly stock five years ago, here’s how much you’d have today. originally published by The Motley Fool
