In the exclusive club of trillion-dollar market capitalization, only a select few have earned membership. Eli Lilly, the pharmaceutical giant, is knocking on the door with a valuation of around $820 billion. But with its remarkable growth prospects, it’s poised to not only join the $1 trillion club but potentially even breach the $2 trillion mark by 2030.
What constitutes robust revenue growth for a corporation? The answer varies by industry. For pharmaceutical companies, especially established ones, high single-digit to low double-digit percentage increases are considered impressive. Anything above that is exceptional. Eli Lilly’s quarterly revenue growth over the past year has consistently exceeded 24%, a remarkable feat.
The driving force behind this growth is tirzepatide, the active ingredient in Mounjaro and Zepbound, medications for diabetes and obesity, respectively. Approved in 2022, these drugs have already generated over $4 billion in sales in a single quarter, a rare achievement in the pharmaceutical industry. With multiple indications in phase 3 clinical trials, including obstructive sleep apnea and type 2 diabetes prevention, tirzepatide’s potential is vast.
Furthermore, Eli Lilly’s recent approval for Kisunla, an Alzheimer’s disease treatment, addresses a significant unmet need in the market. This medication is expected to exceed $1 billion in annual sales, contributing to the company’s strong revenue growth.
The company’s pipeline is filled with promising products, particularly in the area of weight loss medications. Two anti-obesity candidates, orforglipron and retatrutide, are projected to generate $8.3 billion and $5 billion in revenue, respectively, by 2030.
While Eli Lilly’s forward price-to-earnings ratio is high, analysts expect the company’s earnings per share to grow at an average of nearly 73% over the next five years, making its shares reasonably valued. To reach $2 trillion by 2030, the company’s market capitalization would need to grow at an annual rate of at least 14.7%, a challenging but achievable target.
With its impressive growth prospects and robust pipeline, Eli Lilly is well-positioned to become one of the most valuable companies in the world.
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