Eli Lilly becomes first healthcare company to reach $1 trillion market capitalization

Eli Lilly reached a market capitalization of $1 trillion on Friday, becoming the world’s first healthcare company to join the exclusive club dominated by technology companies.

Eli Lilly briefly reached the $1 trillion mark in morning trading, but has since fallen. The stock last traded at around $1,048 per share. Eli Lilly becomes the second non-tech company in the US to reach the coveted $1 trillion mark, after Warren Buffett. Berkshire Hathaway.

The company’s stock has risen more than 36% this year as investors praise the company’s gains over its biggest rivals. novo nordisk GLP-1 in the pharmaceutical field. The Indianapolis, Ind.-based company’s stock is riding on the soaring popularity of its weight-loss injection Zepbound and diabetes drug Munjaro.

These two drugs led to amazing sales growth for Eli Lilly. The drug company announced last month that Munjaro had revenue of $6.52 billion in the third quarter, an increase of 109% year over year. Zepbound, on the other hand, posted revenue of $3.59 billion in the same period, an increase of 184% year-over-year.

Demand for treatments will further increase as approval for their use and insurance coverage expands. Additionally, the company expects an oral version of its popular drug to hit the market next year, which could provide patients with a more convenient option than injectables, which are easier for the company to manufacture.

Eli Lilly is likely to remain a dominant player in the weight loss drug market, with some analysts believing its value could exceed $150 billion by the early 2030s.

But despite recent struggles and a management shakeup, Novo Nordisk remains a formidable competitor to Eli Lilly in this space. Pfizer also made a breakthrough in the market earlier this month when it won a $10 billion battle with Novo Nordisk to buy obesity drug maker Metsala.

Eli Lilly, a medicinal chemist and Union Army veteran of the Civil War, founded the company that bears his name in 1876. The company has long been at the forefront of diabetes treatment, introducing the world’s first commercially available insulin in 1923.

By 1952, Eli Lilly was a publicly traded company on the New York Stock Exchange, and for decades relied for much of its profits and revenue on a series of widely successful products. This included insulin, the antidepressant Prozac, and an early polio vaccine.

Eli Lilly hit the jackpot in May 2022 when it approved tirzepatide for diabetes, sold as Mounjaro. It began to compete with Novo Nordisk’s diabetes injection Ozempic, which entered the market several years ago.

But Eli Lilly has brought a new way to treat diabetes and, by extension, obesity. Tirzepatide works by mimicking two hormones produced in the intestines called GLP-1 and GIP. GLP-1 helps reduce food intake and appetite. GIP, which suppresses appetite, may also improve the way your body breaks down sugar and fat.

Meanwhile, semaglutide, the active ingredient in Novo Nordisk’s Ozempic and its weight loss drug Wigovy, targets only GLP-1.

Mounjaro achieved “blockbuster” status, or more than $1 billion in annual sales, in its first year on the market. Eli Lilly then won approval for tirzepatide as an obesity drug in late 2023, sold as Zepbound and now competing with Novo Nordisk’s Wegovy.

By 2024, Mounjaro had generated $11.54 billion in revenue and Zepbound had $4.93 billion in revenue.