Eli Lilly (LLY): Dominating Diabetes, Cancer, and Obesity Drugs

Eli Lilly: From Insulin Blockbuster to Obesity Leader

The largest pharmaceutical companies are often built over one “blockbuster” product, a medical discovery so impactful that it shapes the company’s future ever after.

This is the case for Eli Lilly, a company that produced the world’s first animal-source insulin and first commercially available insulin product in 1923, making a fatal disease with no effective treatment options, suddenly manageable.

Since then, Eli Lilly has been a giant in diabetes therapies, alongside a handful of competitors like Novo Nordisk (NVO +2.46%).

In a large part building on this initial success, the company progressively diversified into new medical areas, becoming a leader in cancer therapies and working on therapies in neurodegenerative diseases.

The company has been undergoing a new transformation in recent years. Since then, Novo Nordisk repurposed its diabetes drug semaglutide into a blockbuster anti-obesity drug under the brand Wegovy. The capacity of drugs of this class to work beyond diabetes has been a major focus of the pharmaceutical industry.

Despite a late start, Eli Lilly seems to now take the lead in this market with its own incretin analog, Mounjaro/Zepbound.

Eli Lilly Overview

Eli Lilly is a massive pharmaceutical company, having made $45B in revenues in 2024 and a net income of $10.5B. By market capitalization, it is the world’s largest pharmaceutical company, with a market cap of $696B.

This position of leadership in the industry was actually established early, with the company having already, in 1917, “the largest capsule factory in the world” and reported that the company was “capable of producing 2.5 million capsules a day”.

The company employs almost 48,000 people, with 23.8% of the workforce working in R&D, with Eli Lilly having spent $11B in R&D in 2024, with clinical research conducted in more than 55 countries.

In 2024, the company’s medicine reached 58.2 million patients.

The core of the company is its diabetes treatments, with a long series of molecules discovered and approved in the past 3 decades for this disease. This included Tirzepatide, commercialized under the Mounjaro brand name, making quick progress into the obesity market (see below).

Source: Eli Lilly

In the past, some other important medicine from the company have been anti depression drug Prozac, Ceclore, which ultimately became the world’s top selling oral antibiotic, Cialis, the competitor to Viagra, as well as being the first company to mass produce polio vaccine and having as starting point of the company in 1876 with quinine, an anti-malaria drug.

In the 2010s, Eli Lilly went big in oncology (cancer treatments) with a series of acquisitions and partnerships in the field, as well as in-house drug development efforts to build a strong portfolio of oncology drugs.

Oncology is today the second largest segment, although a much smaller one than the diabetes/metabolic segment.

Source: Eli Lilly

Eli Lilly and the Exploding Obesity Drug Market

Due to GLP-1 drugs and other molecules from the incretin class, the obesity market has exploded in 2024, reaching $30B for the first time, an over ten-fold increase since 2020.

It is expected to grow to $61.7 billion by 2029, or a Compound Annual Growth Rate (CAGR) of 14.4%.

The development of new obesity drugs is largely driven by the current 2 leaders of the market: Novo Nordisk and Eli Lilly, bringing together 73% of all programs, either alone or in partnership with other companies.

Source: Research and Markets

In total, 2.5 billion adults (18 years and older) were overweight. Of these, 890 million were living with obesity.

With 1 in 8 people suffering from obesity in the world, this represents a very large market with further space to grow as obesity drugs improve and treatment becomes more commonly used.

Moving Past GLP-1 Drugs

Eli Lilly’s Mounjaro/Zepbound works as both a GLP-1 receptor agonist, similarly to Novo Nordisk’s Wegovy, but also as a GIP (gastric inhibitory polypeptide) analog.

GLP-1 and its analog semaglutide is a rather complex molecule; the way it works is by regulating a wide array of digestion and metabolic mechanisms, impacting insulin production in the pancreas, regulating blood sugar levels, slowing digestion, and reducing appetite.

Source: News Medical

GIP is another hormone released after eating, which makes us feel full after a meal.

When combined together with GLP-1, the GIP effect of the drug has the advantage of reduced nausea and makes it, as a result, a serious competitor to Wegovy.

“The biggest problem with GLP-1 drugs is that they have to be injected once a week, and they can induce a very strong feeling of nausea. As much as 40% of people using these drugs give up after the first month.”

Krishna Kumar – Professor of Chemistry at TUFTS

Mounjaro and Zepbound, the same molecule but for anti-obesity treatment, have been responsible for most of the company’s growth in the 2023-2024 period, with Verzenio, a breast cancer treatment, contributing as well.

Source: Eli Lilly

Winning The Obesity Market (For Now?)

Incretin analogs are a class of molecules, including GLP-1, glucagon, and GIP, all regulating blood sugar and appetite, and therefore, efficient in treating both diabetes and obesity.

Eli Lilly is now the market leader in incretin analogs in the USA, with 53.3% of the market share of total prescriptions. This resulted in the company seeing a revenue growth of 45% year-to-year for its key products.

Source: Eli Lilly

Beyond the technical superiority of Zepbound over Wegovy regarding nausea side effects, another factor was the relatively botched launch of Wegovy.

One issue was the insurance coverage lagging behind demand.

Without robust coverage, many patients could not afford Wegovy’s monthly cost of up to $1,300.

How Novo Nordisk misread the US market for its weight loss sensation – Reuters

Another more serious issue was Novo Nordisk’s inability to produce enough semaglutide, with recurring shortages despite ramping up production several times in 2023 and 2024.

This stemmed from both poor management of production and management of inventory. Now, former employees of Novo Nordisk are explaining how it happened:

“The forecasting was way, way off. Sales and marketing executives said at the time, ‘we’ve got a lot of research that tells us this is going to take off like crazy. We need to wait until the pharmacies are stocked and ready to go. But Doug Langa said …no, we’re going to launch.'”

How Novo Nordisk misread the US market for its weight loss sensation – Reuters

So not only could sales have been better with better management of insurance, but manufacturing also reduced the ability of the company to benefit from its first mover advantage.

In contrast, Eli Lilly entered with an ample supply; it quickly became the dominant player in parts of Europe and the Middle East, said two of the former employees.

How Novo Nordisk misread the US market for its weight loss sensation – Reuters

Overall, the competition over the obesity market between Eli Lilly and Novo Nordisk proves that while the chemical properties of a drug matter a lot, the ability to properly handle reimbursement, production, and sales channels is also important, a field in which Eli Lilly has remarkable expertise.

To answer the associated demand with these strong sales, Ali Lilly is planning to drastically expand its US manufacturing capacities, with a total of $50B of investments planned.

What’s Next for Eli Lilly After Zepbound?

More Hormones

If GIP + GLP-1 drugs work better, why not add another incretin hormone to the mix to create an even better product?

This is the approach taken by Eli Lilly with the addition of glucagon, another closely related hormone. As each of these hormones has its own receptors in human cells, the combined effect can be better tolerated and more powerful.

Retatrudide, an Eli Lilly molecule combining the effects of glucagon, GLP-1, and GIP, is currently undergoing clinical trials.

The early clinical trial results indicate that it might have an even greater achievable weight loss (up to 24%) compared to the original GLP-1 drugs (6-15%), with equal or better results on side effects.

Eli Lilly is going all-in in these therapeutic areas with other products as well, essentially testing many possible combinations of incretin drugs and seeing what works best.

One is bimagrumab (activin/myostatin type II receptor inhibitor) in combination with semaglutide (GLP-1) to deliver weight loss while preserving muscle mass (phase 2b).

Another is eloralintide (amylin receptor agonist), which also helps regulate appetite and blood sugar levels.

Mazdutide is a dual agonist of the GLP-1 receptor and glucagon receptor, currently in phase II of clinical trials.

The Ultimate 4-in-1 Drug?

This is still not all for Eli Lilly prospects in the obesity market. Peptide YY (PYY) is another target, as this molecule is secreted by the gut after we have eaten a meal. Its main role is to reduce appetite and slow the food-emptying process out of the stomach.

More interestingly, these effects are mediated by an entirely different mechanism than either GLP-1 or GIP.

Source: Journal of the American Chemical Society

It might even have an additional effect of “burning off fat, which is of course one of the most desired final effects of any anti-obesity drug.”

We reported the first insight on this research track in “New Obesity Drug Targets Four Hormones For Superior Weight Loss.”

An additional effect could be to reduce the loss of muscle mass when taking an obesity drug, a persistent concern about these therapies.

This can be compounded by the tendency of patients to regain weight when interrupting the treatment, with a seesawing effect of losing both fat and muscle when losing weight, but regaining only fat during the rebound.

“This two-pronged approach will not only support reaching and keeping one’s target weight, but may also help preserve bone and muscle mass.”

Martin Beinborn – Professor of Chemistry at TUFTS

However, investors should be aware that this is still a very early stage of research, and it will likely take years before turning it into a commercial product.

In a 5-10 year time frame, it is possible that a drug or more likely a drug combination will be bringing together the effects of GLP-1, GIP, Glucagon, PYY, amylin, while reducing muscle mass losses, and will be the “final form” of anti-obesity drugs.

More Practical Administration

Another approach taken is to make the GLP-1 drug a lot easier to take than a weekly injection. This is the promise of orforglipron, the first oral small molecule glucagon-like peptide-1 (GLP-1) receptor agonist, taken without food and water restrictions, to successfully complete a Phase 3 trial.

We are pleased to see that our latest incretin medicine meets our expectations for safety and tolerability, glucose control, and weight loss, and we look forward to additional data readouts later this year.”

As a convenient once-daily pill, orforglipron may provide a new option and, if approved, could be readily manufactured and launched at scale for use by people around the world.”

David A. Ricks – Eli Lilly CEO

The drug would also have no cold-chain requirement, making its storage and distribution a lot easier and cheaper than current GLP-1 drugs.

Submission of the drug for approval to the FDA is expected at the end of 2025. Extra applications of orforglipron in the treatment of obstructive sleep apnea (OSA) and hypertension will be investigated in 2026 and 2027.

Source: Eli Lilly

Other Therapeutic Areas

Diabetes

Increasingly, it is clear that type-2 diabetes and obesity are diseases with so much overlap that it has become hard to fully distinguish which is being treated when using drugs of the incretin class.

Nevertheless, this is still going to be important as a therapeutic target for Eli Lilly, as it can leverage its reputation and doctor network built in diabetes over several decades. This should help sales and build the company as a full-spectrum metabolic diseases specialist.

Cancer

Currently, Eli Lilly has 6 different cancer drugs commercialized.

It is still expanding this segment quickly, with many types of cancers and organs targeted.

Source: Eli Lilly

Among the ongoing programs, 1 is in regulatory review (imlunestrant), 9 are in phase III of clinical trials (the last part), and 9 are in phase I.

Overall, this could indicate that Eli Lilly will hopefully have several new products reaching approval in the coming 2-3 years. It however could have little after that for a while, as there is currently no oncology drug in phase II of clinical trials.

Immunology

Eli Lilly is working on entering the immunology market, especially in inflammation and autoimmune diseases. It has 4 products in phase III of clinical trials, 9 in phase II, and 2 in phase I.

The diseases targeted are varied, with a strong focus on psoriasis & psoriatic arthritis, rheumatoid arthritis, ulcerative colitis, Crohn’s disease, and allergic rhinitis.

Neurology

The most important programs in this segment are for Alzheimer’s disease, with 2 molecules in phase III of clinical trials in the neurology category (both for Alzheimer’s), 5 treatments in phase II (mostly gene therapies), and 4 in phase I.

Eli Lilly also saw Amyvid (florbetapir F 18 injection) being approved in June 2025 for brain imaging to estimate amyloid plaque density, a method used in patients with cognitive impairment to evaluate for Alzheimer’s disease and other causes of cognitive decline.

Eli Lilly Shareholders Returns

In the past 5 years, the company has massively outperformed financial markets and the pharmaceutical industry in terms of returns to shareholders, driven by growing stock price, share repurchases, and dividends.

Source: Eli Lilly

These returns were not done to the detriment of long-term growth, as a lot of money was also allocated to capital expenditure and R&D.

Source: Eli Lilly

Conclusion

It is certainly not an accident that Eli Lilly has been, for almost a century, one of the largest and most important pharmaceutical companies in the world. This position was built over a deep understanding of the sector, as well as the ability to either move early or follow quickly the most important innovations of the sector, rotating from one blockbuster therapy to the next: quinine, insulin, Prozac, antibiotics, polio vaccine, Cialis, etc.

A new chapter in this business saga is currently being written, with Eli Lilly surpassing Novo Nordisk in the newly created and rapidly expanding obesity market. This is achieved in part through ultra-efficient business operations and partly through an improved product compared to the initial GLP-1-focused Wegovy.

With a stream of innovations still in the pipeline, Eli Lilly might surprise the market by continuously releasing improved obesity drugs, which will not only help to defend or conquer more market shares but also grow the market quicker.

Besides diabetes and obesity, the company is also building a solid portfolio in oncology, and might have some good surprises in reserves in immunology and neurology.

Overall, investors in Eli Lilly will want to keep their eyes on the obesity market, likely to become even more the cornerstone of the company in the future, while hoping the other segments will contribute to growth as well.

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