Eli Lilly's Potential $50 Billion Annual Sales from Weight-Loss Drugs

According to analysts from J.P. Morgan, pharmaceutical giant Eli Lilly could potentially achieve a remarkable $50 billion in annual sales from its weight-loss drugs by 2030. This projection positions Eli Lilly as one of the leading beneficiaries of the booming obesity treatments market.

The analysts at J.P. Morgan have revised their sales estimates and anticipate that the weight-loss drugs market as a whole could reach an incredible $100 billion in annual sales over time. They predict that Eli Lilly and Denmark's Novo Nordisk will likely continue to dominate the market, with an equal share between them. Moreover, J.P. Morgan expects the sales to be equally split between the obesity and diabetes markets.

Eli Lilly's success in this space is largely attributed to its class of drugs known as incretins, which have demonstrated the ability to suppress appetite and reduce food intake. The analysts at J.P. Morgan project that Eli Lilly's sales from its incretin portfolio will surge from $8 billion in the previous year to $23 billion in 2025, $34 billion in 2027, and ultimately reach an astonishing $50 billion by 2030.

The analysts further express optimism that there may be potential for even greater growth beyond their current estimates.

Eli Lilly's strong position in the market is evident through the success of its Mounjaro drug, which received approval for diabetes treatment and surpassed sales expectations in the second quarter. Additionally, Eli Lilly has an upcoming version of the drug called tirzepatide, which is expected to receive approval for obesity treatment later this year.

According to J.P. Morgan analysts, the obesity approval for Mounjaro/tirzepatide is just one of several pivotal events expected to drive the company's stock performance during the latter part of this year and early 2024. The analysts have assigned an Overweight rating to Eli Lilly stock with a price target of $600, implying a 7% upside from the current price as of Wednesday.

In a recent milestone achievement, Novo Nordisk overtook luxury conglomerate LVMH to become Europe's most valuable company following the availability of its weight-loss drug, Wegovy, in the U.K. This Danish pharmaceutical company now boasts a market capitalization of $432 billion, surpassing the size of Denmark's economy.

Wegovy, which is approved for obesity treatment, shares the same active ingredient as Ozempic, the drug approved for Type 2 diabetes.

In the U.S., Novo Nordisk's market capitalization would position it as the 14th most valuable company in the S&P 500, nestled between UnitedHealth and Walmart.

Furthermore, it is worth noting that Eli Lilly currently holds the ninth rank in terms of market value, with a market cap of $531 billion.